Construction output increased by 1.4% in the three months to January 2020, according to the latest ONS figures, however ‘underlying long-term growth is still fragile’
The increase in construction output was driven by 2.4% growth in new work but offset by a 0.6% fall in repair and maintenance.
The rise in new work in the three months to January 2020 was because of growth in all sectors, with the largest positive contributions coming from private housing, private commercial and infrastructure, which increased by 2.4%, 2.1% and 1.7% respectively.
In repair and maintenance, the fall in the three months to January 2020 was due to a fall in private housing, which decreased by 5.6%. In comparison, public housing repair and maintenance, and non-housing repair and maintenance increased by 2.0% and 2.4% respectively.
Construction output decreased by 0.8% in the month-on-month all work series in January 2020, this was driven by a 2.4% fall in repair and maintenance as new work saw flat growth (0.0%).
Response to construction output figures
Clive Docwra, managing director of McBains, said: “The construction sector will give a cautious welcome to these figures, in particular positive growth in private housing, private commercial and infrastructure work.
“Underlying long-term growth is still fragile however, with the figures showing volatile patterns over previous months, and the industry will be looking with interest at the Chancellor’s budget later today for any announcements that will give the sector a much-needed boost.
“Clarity on growth over the next few months is doubly important as the impact of coronavirus is an unknown quantity. If workers have to self-isolate, this will trigger a dip in activity, and if financial market values continue to fall then this will also have an impact on investors’ capacity to commit to new projects.”
Allan Callaghan, managing director of Cruden Building, commented: “It’s encouraging to see a return to construction output growth…
“However, in order to grow sustainably and future-proof the business, we need to continue to attract new talent into the industry. Initiatives such as last week’s Scottish Apprenticeship Week are vital to shine a spotlight on the sector and educate more young people on the diverse range of roles available.
“On a cautionary note there is little doubt that the weather in the shape of the excessive rainfall may impact on output from the first quarter and the as yet unknown impact of the control of the Covid19 virus combined with the post-Brexit uncertainty are all factors which need micro and macro managed to maintain output.”
