ONS: Construction output rises by 1.1%

Michael Lloyd

January 13, 2020

Construction output increased by 1.1% in the three months to November, ONS data has showed.

This was driven by a 1.6% growth in new work.

Private housing was the only sector within new work to see a fall in construction output in the three months to November compared to the previous three months, decreasing by 0.4%.

Andy Sommerville, director at Search Acumen, said: “The UK construction industry stands on a threshold – advancing forwards to achieve new heights or slipping backwards to stagnation.

“Growth has been slow, but the UK construction market still stands tall in Europe.

“While the volume of construction orders has advanced only incrementally in the past year, the value of orders is at an all-time high and so is the number of construction firms in operation.

“The newfound clarity over the political situation has started to provide some necessary reassurance but we also need decisive action to ensure we take a step in the right direction.

“Space will always be a premium in the UK, especially in the biggest cities.

“Data led solutions can give us powerful insights into what land is available and how best to use it.

“The UK’s construction industry is world leading.

“Let’s have the confidence to step forward and use the tools at our disposal to seize the opportunities ahead.”

Repair and maintenance grew by 0.2% in the three months to November, compared with the previous three months.

Like in new work, the only sector to see a fall was private housing with private housing repair and maintenance decreasing by 1.9%.

Gareth Belsham, director of the national property consultancy and surveyors Naismiths, added: “Fragile confidence, weak demand and contractors running out of orders – it’s all there.

“Rising output in infrastructure and commercial construction was tempered by a contraction in private sector housebuilding.

“Yet the month-on-month increase, which jumped to 1.9% – the highest level since January 2019 – gives a hint of the rebound that has followed the election.

“Such a clear election result and an end – for now – to Brexit uncertainty have helped the industry to reset.

“The return of clarity, if not yet unbridled confidence, is prompting many developers who spent 2019 sitting on their hands to pull the trigger in 2020.

“The industry is far from back to health, but in the space of less than a month, its newfound sense of purpose is starting to make these November figures seem very distant.

“The questions now will be how long the Boris bounce can sustain, and whether the capacity-cutting of last year will hamper contractors’ ability to cope with a rise in demand.”

Neil Knight, business development director at Spicerhaart Part-Exchange & Assisted Move, said: “The figures released before Christmas suggested that construction was flattening off in the private sector.

“While the latest data shows an improvement on last month, overall volumes are similar to the same time last year.

“As a result of last month’s General Election, there is now much greater political certainty.

“We’re already seeing a strong start to the year, and we’d expect to see confidence returning to the market throughout 2020.

“That will take a while to feed through into more positive output figures though, so we wouldn’t expect to see an immediate improvement.

“It’s not just about confidence: now that we have a government with a stable majority, it would be good to see some evidence of a long-term strategy to tackle some of the problems in the housing sector.

“The Budget in March will be an opportunity for the government to show that it gets this.”

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