The Office for National Statistics (ONS) has released its GDP monthly estimate for October 2024, highlighting a slowdown in construction growth
The ONS construction statistics show a decline in monthly output of 0.4% in October 2024 after an increase of 0.1% in September.
This fall was due to repair and maintenance, which fell a whole 1.3%, heavily off-setting growth in sectors like new work, which grew 0.2%.
Four out of nine sectors saw a decline in October
At a sector level, private housing repair and maintenance was the main contributor to the monthly decrease, which fell by 3.8%.
The ONS construction statistics also show that, in the three months leading to October, construction output grew by 0.4% compared to the three months to July 2024. Over this period, new work increased by 1.7%, with infrastructure new work being the largest contributor, growing by 3.0%.
Repair and maintenance fell by 1.2% in this period, with the largest declining factor being private housing repair and maintenance falling by 4.0%.
Construction work in October saw new housing take up 20.8% of work, new work took 57.3%, and repair and maintenance took 42.7%, with 20.5% of that being housing repair and maintenance.
“Respectable rather than riproaring”
This is all indicative of a slowing growth in the construction industry, especially after the record-breaking growth in 2023, where new work especially grew by 4.2% overall.
However, there was also a worrying drop in registered firms.
Charlotte Whincup, director of Bloom Building Consultancy, said: “Construction has held onto its crown as the fastest growing industry in Britain’s shrinking economy, but its grip is loosening.
“Its growth of 0.4% in the three months to the end of October was respectable rather than riproaring, and comfortably above the feeble 0.1% expansion posted by the economy as a whole during the quarter.
“But today’s official data confirms for the first time how badly things slowed in the weeks leading up to the Budget. Nearly half of the construction industry’s subsectors contracted during October, and output across construction as a whole shrivelled by 0.4% on the month.
“The data also shows just how divergent the fortunes of different parts of the industry have become. Commercial property is holding its own and demand from infrastructure projects remains strong, but housebuilding saw further declines in output.
“All this underlines what a mountain the Government has to climb with the planning reforms it hopes will kickstart a flurry of housebuilding across the greenbelt.
“The high cost of land and planning red tape are only parts of the puzzle, of course – the high cost of finance is another. If there is one ray of light from Britain’s shrinking economy, it’s that it may strengthen the Bank of England’s resolve to keep trimming interest rates in 2025. Making it cheaper for developers to buy land and build homes will go a long way towards re-energising the battered residential construction sector.”
