Construction output falls for third successive month

This is the third consecutive monthly fall in construction output.

The decrease in monthly output to £15,360m came solely from a decrease in new work (0.4% fall), with repair & maintenance being flat (0.0%) on the month, the ONS said.

It cited anecdotal evidence continuing to indicate a slow-down in private housing. However, some businesses across other sectors continued to report an easing in inflation.

Alongside the monthly decrease, construction output saw an increase of 0.2% in the three months to May 2023; this is the ninth period of consecutive growth in the three-month-on-three-month series. However, this is the weakest growth since the decrease in the three months to August 2022 (0.1% fall).

The increase in the three-month-on-three-month series came solely from a rise in repair & maintenance (2.5%), as new work saw a decrease of 1.3%. Despite this increase, total repair & maintenance has weakened since the start of the year.

Commenting on the numbers, Fraser Johns, finance director at Beard Construction, said: “A reduction in construction output, prompted by a decrease in new order volumes certainly demonstrates how unpredictable the first half of the year has been. Nonetheless, the three-month picture saw a rise in output – if only marginally, thanks to demand for repair and maintenance.

“While some sectors are feeling the pressure, particularly private housing, and uncertainty in the wider economy may be inhibiting some clients from pulling the trigger on new work, this is certainly not the entire industry picture. At Beard, we haven’t seen a drop off in pipeline opportunities with strong signs of solid demand. In addition to commercial refurbishment projects, we have seen a broad portfolio of work with demand in care, education and with local authority as frameworks remain very active.

“It is certainly not normal trading conditions, but it is proving less volatile than the wider industry picture may represent. Slowly and surely, the hope is we return to more stable conditions but there are many factors at play in making this is a reality. For us and many firms across the industry, it’s all about remaining agile, minimising pressure on cost plans and responding to the opportunities still available.”

Clive Docwra, managing director of property and construction consultancy McBains, said: “After the construction industry experienced a decrease in output in the two previous months, today’s statistics confirm that many work sectors are struggling to attract new orders. 

“Private house-building in particular is still in the doldrums and the low activity is having a big impact on overall confidence within the construction sector. 

“The fall in output in May should be kept in perspective as estimates show growth is increasing over the medium term, but given this is the weakest growth since August last year, the industry is still a fair way from recovery.” 

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