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February sees construction struggling to gain momentum

11 Apr 19 There was a modest 0.4% growth in construction output in Great Britain in February 2019 but the industry is still getting over the 2.8% fall that it suffered in December.

Compared to January, February 2019 saw a 1.1% increase in new work but a 1.0% fall in repair & maintenance.

The latest bulletin from the Office for National Statistics also reports that the 2018 annual growth rate estimate has now been revised downwards to 0.3% from 0.7%.

The total value of all construction work delivered in Great Britain in February 2019 is put at £13,926m, which is 0.4% up on the previous month and 3.3% up on February 2018.

However, a more reliable indicator of trends is the rolling three month data – in this case, December 2018 to February 2019. And because of that 2.8% fall in December, the rolling three months figure shows construction output decreasing by 0.6%; repair & maintenance was down 1.0% for the three months and new work down 0.4%.

The decrease in the new work was driven by a fall in the private commercial sector, which decreased by 3.7%. The decrease in repair & maintenance was driven by a 2.6% fall in non-housing repair & maintenance.

Construction output main figures, February 2019, Great Britain

Seasonally adjusted, volume £m and percentage change

  Volume £m Most recent month on the previous month Most recent month on year Most recent three-months on three-months earlier Most recent three-months on year
Total all work 13,926 0.4 3.3 -0.6 0.8
Total all new work 9,139 1.1 2.6 -0.4 0.1
Total repair & maintenance 4,788 -1.0 4.7 -1.0 2.1
New housing          
Public 538 -0.7 14.7 3.5 11.0
Private 3,160 2.9 2.8 -1.7 0.1
Other new work          
Infrastructure 1,902 2.6 12.6 1.5 7.1
Excl infrastructure          
Public 877 -1.6 9.5 4.7 3.5
Private industrial 414 -1.7 4.9 4.6 3.8
Private commercial 2,247 -0.5 -9.3 -3.7 -8.7
Repair and maintenance          
Public housing 607 0.8 2.8 0.2 -0.6
Private housing 1,807 0.6 2.4 0.8 0.6
Non-housing R&M 2,374 -2.7 7.1 -2.6 4.1

Figure 2 shows that a 1.1% increase in all new work was the driving force behind the 0.4% month-on-month growth in all work, as repair and maintenance saw a 1.0% decline over the same period. This brings the all work series to a new high level of £13,926m, the highest seen since monthly records began in January 2010, and overtaking the previous record of £13,880m seen in September 2018.

Clive Docwra, managing director of construction consultant McBains, said: “Given the continuing ‘will-we, won’t we’ saga of when the UK will be leaving the EU, today’s figures buck the trend we were expecting.  However, although there was moderate growth in February, the general trend is of slowing growth since mid-2018.

“Indeed, the long term outlook is even gloomier as a weak UK economy, volatile pound and worries over the long term impact of Brexit mean caution from investors is the watchword, as evidenced by a fall in private commercial new work.  We expect that will translate into a continued, more serious, contraction for the sector over the coming months.”

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