Construction output at record highs due to commercial work

Construction output recorded an all-time level high in November 2018, driven primarily by strong growth in private new housing, private commercial new work and public housing and repair maintenance, ONS statistics showed.

These increased by 3.1%, 2.3%, and 5.8% respectively meaning the month-on-month series for construction output rose by 0.6%, resulting in the total value of construction output exceeding £14bn for the first time since monthly records began in 2010.

Andy Sommerville, director at Search Acumen, said: “The UK commercial real estate sector was a rare bright spot in the last quarter of 2018, with new commercial work helping bring up otherwise poor construction figures.

“Property developers have spent the year worrying about just how bad the fallout from Brexit could be for the sector, which has meant the default ‘wait and see’ approach has stalled projects.

“Even with a strong Help to Buy scheme continuing to prop up new residential developments, 2019 remains uncertain for the industry. Anaemic growth figures point to trepidation to invest while we don’t know how leaving the EU, with or without a deal, will affect the sector.

“We’re not expecting this to ease any time soon – or at least, we’re not expecting this to ease any time close to Brexit. But we are hopeful that once we know our fate, it won’t take too long to get back to work and to get construction back up to speed.”

The three-month on three-month series for all work was up 2.1% for November 2018, driven by all new work, which increased by 3.4%. But this was offset slightly by a decline in all repair and maintenance,which fell by 0.4%.

The increase in the all new work three-month on three-month series was driven primarily by private new housing and infrastructure which increased by 4.9% and 6.5% respectively.