The Office for National Statistics (ONS) has released figures on construction output in Great Britain for April 2023
In April 2023, monthly construction output experienced a decrease of 0.6%, following two consecutive months of growth. This decline could be blamed on the decrease in new construction work, which fell by 1.0%. However, there was a slight increase of 0.1% in repair and maintenance activities in this period.
Five out of the nine construction sectors saw a decline in construction output in April. The main reasons for this were private housing repair and maintenance, which saw a decrease of 5.7% (£149 million), and private housing new work, which decreased by 3.0% (£99 million).
Construction output in the private housing sector will continue to decrease
Evidence suggests construction output in the private housing sector will continue to fall, with economic concerns causing customers to rethink construction work. However, similarly to the previous month, some companies in other sectors reported a slight easing of inflation.
Construction output in the UK grew 1.6% in the three months leading up to April 2023. This marked the eighth consecutive period of growth in the three-month-on-three-month series. The increase in output during this period was due to a rise of 5.7% in repair and maintenance work, as new construction projects saw a decrease of 0.9%.
Private housing repair and maintenance increased in April
The main positive contributor to the three-month growth was private housing repair and maintenance, which experienced an increase of 7.1%. Despite the sharp decline in monthly data, this sector had shown strong growth in the previous two months. Another important contributor to the three-month increase was non-housing repair and maintenance, which grew by 4.6%.
“After last month’s figures fuelled hopes of green shoots of recovery, today’s statistics will come as a blow to the construction sector,” said Clive Docwra, managing director of property and construction consultancy McBains.
“Particularly disappointing was that the fall was a result of a decrease in new work, suggesting that confidence remains low among many big investors. It’s little surprise that private housing continues to struggle, and with falling house prices and low mortgage approval rates, it will take some months before volume housebuilding shows a turnaround,” he concluded.
