The Office for National Statistics (ONS) estimates that construction output decreased by 0.5% in volume terms in December 2023. This is the third consecutive fall in monthly construction output, which resulted in a quarterly fall of 1.3% between the third and fourth quarters of the year.
The quarterly fall was caused by a 5% decrease in new work; repair & maintenance work increased by 4.0%.
December’s 0.5% fall was down to a 1.1% fall in new work; repair & maintenance increased 0.4% on the month.
For the year as a whole, annual construction output is estimated to have increased by 2.0% in 2023 compared with 2022, making it the third consecutive year of annual growth.
Total construction new orders decreased 13.1% (by £1,361m) in the four quarter of 2023 compared with Q3 2023. This quarterly fall in orders came mainly from the private commercial and industrial sectors, which decreased by 18% and nearly 28% respectively.
The annual rate of construction output price growth was 3.1% in the 12 months to December 2023. This has slowed from the record annual price growth in May 2022 and June 2022 (10.7%).
Clive Docwra, managing director of property and construction consultancy McBains, commented: “Today’s figures represent a serious blow for the construction industry, coming off the back of two previous months of falling output.
“It’s now crunch time for the sector with the UK economy entering recession in the final quarter of last year. In recent months a fall in new housebuilding has been a big factor in the decrease in growth, but today’s figures show new infrastructure work – which for a long while has propped up the sector – also drying up.
“While interest rates remain high and the economic picture continues to be unpredictable, we expect the overall outlook for 2024 to be one of uncertainty.
“The hope is that next month’s budget statement by the chancellor includes some measures to provide some impetus to the sector.”
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