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Fri July 19 2024

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May ONS: Output rises 1.9%

11 Jul Brighter weather in May brought a return to growth for the British construction sector in May.

According to Office for National Statistics estimates, Great Britain’s monthly construction output is estimated to have grown by 1.9% in volume terms in May 2024. This follows a fall of 1.1% in April 2024 (revised from a fall of 1.4%).

The increase in monthly output came from increases in both new work (up 2.7%), and repair & maintenance (0.8%).

At the sector level, eight out of the nine sectors saw growth in May 2024. The main contributors to the monthly increase were a 2.8% increase in total new housing, with both private and public new housing increasing on the month, infrastructure new work, which rose by 3.5%, and non-housing repair & maintenance, which grew by 2.1% on the month.

Over the three months to May 2024, however, construction output is estimated to have fallen by 0.7% in. This came from a decrease in new work of 0.9%, and repair and maintenance, which fell by 0.3%.

Clive Docwra, managing director of property and construction consultancy McBains, commented: “After previous statistics showed the construction sector lagging behind the modest uptick in growth witnessed in other industries, today’s figures are much better than expected.

“Especially welcome is that growth was experienced across most work sectors, with new housing seeing a 2.8% increase. Whether or not this represents the green shoots of recovery, however, is unclear.  Over the three months to May output still decreased by 0.7%, showing that growth is still fragile.

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“Despite these returns, the sector still needs a shot in the arm, and developers will hope Labour’s announcement this week to get the country building translates into renewed confidence from investors, both in housing and commercial projects.

“Every sector within the industry will also be crossing their fingers for a period of economic stability to help construction across the board get back on track.”

Fraser Johns, finance director at regional building contractor Beard, said: “While the three-month picture is a little more shaky, we can be really encouraged by a strong upturn in output in May – especially as it was seen across almost all sectors. Although more recent PMI data shows just how volatile the sector is, the news that both private and public new housing is leading this charge will be welcome to the many that rely on this sector. It is a real example of the resilience we continue to see from firms across UK construction.

 “Until we see output and new orders increasing consistently month-on-month, we shouldn’t take anything for granted though. With the election now settled, the hope is we can all pick back up and continue to build momentum during the second half of the year. As we see borrowing conditions improve, with a potential base rate cut in the near future, this will certainly enable more clients to push ahead with plans.

“From our perspective at Beard, the construction sector remains really buoyant with our secured orders at a record high. We continue to prioritise close partnerships with both our clients and our supply chain, as well as a clear focus on both our approach to tendering and our cost plans.”

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