Quarterly construction output saw a decrease of 0.9% in Quarter 1 (Jan to Mar) 2024 compared with Quarter 4 (Oct to Dec) 2023. This came solely from a decrease in new work (1.8% fall), as repair & maintenance output increased by 0.3%.
There were saw falls in GB construction output in both February and March (0.4%) 2024, with the only rise coming in January. Anecdotal evidence suggested that heavy rainfall decreased output and delayed work, the ONS said.
This year’s first-quarter fall was the same percentage as the fall seen in the previous quarter: Q4 2023 was also 0.9% down on Q3.
Total construction new orders increased by 16% (£1,436m) in Q1 2024 compared with Q4 2023; this quarterly increase came mainly from private commercial new work and public other new work, which increased 28% (£700m) and 44% (£536m), respectively, the ONS said.
The annual rate of construction output price growth was 1.5% in the 12 months to March 2024. This has come down from the recent peak of 10.7% seen in May and June 2022.
Recent heavy rain prompted the Construction Products Association (CPA) to revise its 2024 construction output forecasts, predicting that output will fall by 2.2% this year rather than the 2.1% it had been forecasting at the start of the year. [See previous report here.]
Scott Motley, head of programme, project and cost management at Aecom, said: “A downturn in output puts paid to talk of a recovery for now as the sector continues to endure challenging economic conditions. Indeed, we expect the pipeline of new work to reduce in the second half of 2024, especially while interest rates remain high and the impending general election gives rise to a pause in infrastructure investment decisions.
“As such, order books are most likely to be filled by short term repair and maintenance work as firms continue to adopt a precautionary two-stage approach to major tenders to avoid overstretching themselves in a competitive market.”
Clive Docwra, managing director of property and construction consultancy McBains, said: “After last month’s figures showed a fall in output, today’s news will give the construction sector further cause for concern.
“With the broader economic data showing the economy grew by 0.6% in the first quarter of 2024 and is recovering from last year’s technical recession, it demonstrates that growth in the construction sector is struggling to keep pace with the wider recovery.
“A particular worry is that five of the nine construction work sectors experienced a decline in March. Infrastructure contracts, which have propped up much of the industry in recent months, saw a 3.6% decrease.
“A continuing number of variables – not least an impending general election – means that we expect the sector will continue to experience ups and downs over the next few months.”
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