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Construction output falls for second successive month

12 Oct 23 Monthly construction output is estimated to have fallen 0.5% in volume terms in August 2023, according to the Office for National Statistics (ONS).

The second consecutive monthly decrease in construction output is attributed to a decrease in new work, which fell by 1.5%. Repair & maintenance work increased by 1.0% on the previous month.

August’s 0.5% fall follows a decrease of 0.4% in July 2023 (revised from an initial estimate of 0.5%).

The value of construction output in August 2023 is put at £15,584m by ONS.

At the sector level, five out of the nine sectors saw a fall in August, with the biggest fallers being private commercial and private new housing, which decreased 4.1% and 1.4%, respectively.

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With June having seen a 1.6% increase, the three-month period of June-August 2023 saw an increase construction output of 0.9%, with both new work and repair & maintenance increasing by that percentage.

Across the UK economy as a whole, monthly real gross domestic product (GDP) is estimated to have grown by 0.2% in August, following a fall of 0.6% in July 2023. Growth of 0.4% in the service sector was the driver of the modest rise in GDP, with manufacturing and construction both declining.

Clive Docwra, managing director of property and construction consultant McBains, said: “This second successive monthly fall in [construction] output comes as little surprise.  Recovery in the sector still looks some way off while interest rates remain high and caution is still the watchword for many investors, especially in the critically important housebuilding sector where demand remains dampened.

 “Longer-term, the scaling back of HS2 is also likely to have a knock-on effect in terms of new commercial and infrastructure contracts further down supply chains, so the outlook is now increasingly uncertain in other work sectors too."

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