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Output rebounds after wet October

14 Jan Monthly construction output increased by 1.9% in November 2019, partially recovering from the 2.2% fall in October 2019.

November’s increase in output was primarily driven by 2.4% growth in new work and, to a lesser extent, 0.9% growth in repair & maintenance.

The 1.9% increase in November 2019 is the largest monthly growth since January 2019, when it grew 2.4%.

Anecdotal evidence suggests that October’s output was affected by bad weather and thus the increase in November was in some part a reaction to this, the Office for National Statistics (ONS) said.

The longer term trend in construction output has been a slight upward trend in growth since the start of 2017, but at a markedly slower rate than before 2017, ONS said.

Over the three months of September-November 2019, construction output increased by 1.1% compared with the previous three-month period. This was driven mostly by 1.6% (£427m) growth in new work, with a smaller contribution from 0.2% (£35m) growth in repair & maintenance.

Over the three months there were notable increases in infrastructure and private commercial new work, which increased by 3.0% (£163m) and 1.8% (£128m) respectively. Private commercial new work has seen a recovery since April 2019 following 18 consecutive periods of decline between June 2017 and November 2018. By contrast, private housing new work fell 0.4% (£34m).

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In repair & maintenance, the rise in the three months to November 2019 was largely because of the 1.2% increase in non-housing repair & maintenance, with public housing repair and maintenance growing 2.5%. In comparison, private housing repair & maintenance fell by 1.9%.

The Federation of Master Builders said the industry would get a more sustained lift if the government cut value added tax (VAT) on home improvement works – a call it has been making for many years now.

FMB chief executive Brian Berry said: “While 2019 was a year marked by political and economic uncertainty, there does seem to be some small signs of hope for the construction industry, with the largest monthly growth in the industry seen in November since the start of the year. It is too soon to tell whether this will be a longer term trend, as some sectors such as private house building and repair and maintenance continue to see sluggish growth.”

“The upcoming budget provides the perfect opportunity for the government to help ensure this positive trend at the end of 2019 continues into the new decade. In order to help boost the industry, the chancellor should prioritise cutting VAT on home improvement works, so that tax isn’t a barrier to homeowners upgrading the energy efficiency of their properties. The government should also use the budget as an opportunity to invest in construction skills to help build the homes and infrastructure we need, and invest in planning departments to ensure the planning system doesn’t act as a blockage to the government’s ambitious housing targets.”

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