Latest GDP figures show that the UK economy as a whole shrank by 0.3% in August, but GB construction output was up by 0.4%.
And it turns out that August was construction's second successive monthly increase – previously published numbers for July showing a fall have now been revised. A month ago the Office for National Statistics (ONS) said that July’s construction output in Great Britain was down 0.8% by volume compared to June. It has now revised that and says July was actually up by 0.1%.
August 2022 construction output reached £15,011m, behind only May 2022’s £15,035m in the record books. (The records only go back 12 years.)
The increase in monthly construction output in August 2022 came solely from an increase in new work (1.9%), as repair & maintenance saw a decrease (2.0%) on the month.
Infrastructure and private industrial were the biggest growers in new work, up by 5.3%, and 4.3% respectively.
The level of construction output in August 2022 was 3.2% (£461m) above the February 2020 pre-coronavirus level; new work was 0.7% (£69m) below its February 2020 level, while repair & maintenance work was 10.6% (£530m) above the February 2020 level.
Alongside the monthly increase, construction output saw a slight increase of 0.1% in the three months to August 2022; this came solely from an increase seen in new work (1.6%) as repair & maintenance saw a decrease (2.4%).
Anecdotal evidence shared by the ONS indicates that the warm weather in July inhibited construction growth but as the heatwave moderated towards the end of August, activity picked up a little.
Clive Docwra, managing director of construction consultant McBains, said: “The moderate growth witnessed in August shows the construction industry is holding firm during a difficult period.
“It is encouraging that the rise in output is being driven by new work, and the fact that infrastructure, private industrial and private housing new work increased by 5.3%, 4.3% and 1.7%, respectively will be a tonic to the industry.
“However, there are still bumps in the road to be negotiated. Material price inflation may be starting to fall, according to recent figures and from what our clients are telling us, but the cost of construction remains high and further volatility over the medium term can be expected as factors such as Russia’s invasion of Ukraine and the energy crisis bites harder.
“And despite the increase seen in private investment, the risk of recession and high interest rates means some investors are still holding the pause button until the economic picture becomes much clearer.”
Mark Robinson, chief executive of public sector procurement agency Scape, said: “The construction industry continues to defy wider market conditions to contribute to what is now a near year-long run of growth in the sector. As we come out of peak season however, it’s clear that we are set for a challenging winter as inflation continues to affect costs for private and public sector projects alike.”
The full ONS report can be found here.
Got a story? Email news@theconstructionindex.co.uk
.gif)
