ONS: Construction output up 5.8%

Jake Carter

May 12, 2021

build building

Monthly construction output grew by 5.8% in March 2021, according to the Office for National Statistics (ONS).

This is due to growth in both new work, up by 6.7%, and repair and maintenance, up 4.4%.

Construction output in March 2021 was 2.4% (£334m) above the February 2020 pre-pandemic level; repair and maintenance work was 7.7% (£377m) above this level while new work was 0.5% (£44m) below.

Quarterly construction output grew by 2.6% in quarter one 2021 compared with quarter four 2020, driven by growth in both new work, up 2.8%, and repair and maintenance, up 2.2%.

New orders increased by 12.2% (£1,227m) in quarter one 2021 compared with quarter four 2020.

This follows a fall of 7.8% (£848m) in quarter four 2020, but was 13.3% lower than quarter one 2020.

The annual rate of construction output price growth was 1.8% in March 2021.

Gareth Belsham, director of Naismiths, said: “Construction barely bothered with a bounce-back. It has jumped straight back into a boom.

“While March’s gravity-defying 5.8% jump in output may grab the headlines, it’s the industry’s solid growth across the first quarter as a whole that is most encouraging.

“The £1bn, 2.6% expansion over the quarter would be impressive at any time. But coming at a time when the UK was under strict lockdown and all other sectors of the economy were shrinking, it’s a testament to the construction industry’s resilience and ability to incorporate socially distant ways of working.

“Crucially the future is looking brighter by the day too. £1.23bn of new orders poured in during the first quarter, and while this is still below the boomtime levels seen during 2020’s brief, pre-pandemic Boris bounce, it still reveals developers’ surging confidence and a good pipeline of work for builders.

“Private housebuilders are especially busy, with their activity now well past pre-pandemic levels and an incredible 166% up on their low point of last April.

“As the industry revels in full orderbooks and buoyant sentiment, there are growing pains as the mismatch between demand and supply leads material prices to surge.

“While this makes cost management more of a challenge, the combination of optimism, momentum and expansion is an intoxicating one – and the industry is gearing up for a sustained surge in demand as lockdown restrictions are rolled back further.”

Fraser Johns, financial director of Beard, added: “Within 24 hours of the Queen’s Speech outlining key government plans for training and skills, today’s output figures from the ONS serve to underline how crucial that is for the future.

“The construction industry has come through the biggest economic shock since the second world war, with continuing levels of growth getting us back to pre-pandemic levels in March.

“An increase in demand and confidence boosted by the vaccine rollout and a roadmap out the crisis has played its part.

“Now the challenge is to build on that success by ensuring we attract the talented professionals required to take our industry forward.

“But in the short term we also have a significant challenge to face in terms of materials shortages, which in many areas is verging on a crisis.

“As an industry we have to find ways to work around and plan ahead with supply chains to mitigate any serious delays, otherwise we’re in real danger of undermining our comeback from ground zero a year ago.”

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