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ONS: Quarterly construction output up 41.7%

Jake Carter

November 12, 2020

Construction output in the third quarter of 2020 rose by 41.7% on Q2, according to the Office for National Statistics (ONS).

The data shows that this rise was a result of a 40.8% increase in new work, and a 43.4% uplift in repair and maintenance.

Looking to new work, the rise was attributed to private new housing, which grew by 84.4% in Q3.

Meanwhile, the uptick in repair and maintenance was reportedly due to an increase in private housing repair and maintenance, which rose by 70.9% in the third quarter of 2020.

Furthermore, new orders grew by a record 89.2% in Q3. This growth was attributed to an 88.7% rise in new housing and an 89.4% uptick in all other work.

Public new housing was the only sector in Q3 to decline, dropping by 1.8%.

Looking at the data on a monthly basis, construction output rose by 2.9% between August and September 2020.

This increase was driven by a 2.7% rise in new work, and a 3.4% increase in repair and maintenance.

Moreover, the data shows that this represents the fifth consecutive month of growth but the lowest rise in that time.

The annual rate of construction output growth was 0.4% in September 2020.

Gareth Belsham, director of Naismiths, said: “No other industry can match construction for the sheer white-knuckle severity of its decline, and then meteoric recovery.

“After coming to a halt for much of the second quarter, output across the industry rocketed by 41.7% in the third quarter of the year, and it continues to grow faster than any other sector of the economy.

“The industry as a whole remains 7.3% adrift of its pre-pandemic level, but its two hottest subsectors – private housebuilding and infrastructure – have now rebounded completely.

“With the Prime Minister putting construction front and centre of his recovery plan, the industry is stepping up admirably. With work now underway on a swathe of new infrastructure projects, infrastructure output was 1.8% higher in September than it was in February.

“Meanwhile, housebuilders are being deluged with demand. New orders from private sector developers doubled during the third quarter, rising by a gravity-defying 102.9% compared to the second quarter of the year.

“Separate data from the latest PMI survey showed that order books are now fuller than at any time since the pre-Brexit December 2015, suggesting that housebuilders are not just busy now, they are piling up orders for the future too.

“All this is leading to some growing pains, with the supply chain struggling to keep up with demand for certain key building materials.

“Impressive though it is, the recovery is slowing and is still from complete. It is also heavily reliant on the white hot growth of the residential sector, but with socially distant construction work able to continue as usual during England’s second lockdown, the industry is battling on.”

Andy Sommerville, director of Search Acumen, added: “This latest data underlines the scale of the sharp bounce back the construction sector has undergone since the troughs of lockdown.

“Elevated output levels have been largely driven by a recovery of activity in the housing sector. Construction firms have increased housing supply in response to high demand from prospective buyers seeking to capitalise on the financial benefits offered through the higher Stamp Duty threshold.

“Looking forward, severe headwinds are forming that will likely curtail activity in the housing market and dampen construction activity.

“Concern is mounting over how the UK economy will withstand the reintroduction of lockdown measures in England. Reduced demand may cause developers to scale back supply, hitting future output levels.”


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