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Storms hit February construction output

11 Apr 22 Monthly construction output decreased by 0.1% to £14,610m in February 2022 compared to January 2022.

February’s fall in construction output was the first monthly decrease since October 2021. It follows an (upwardly revised) 1.6% increase in January 2022.

The office for National Statistics said that anecdotal evidence suggested that storms experienced between 16th and 21st February delayed projects and more working days were lost on sites and premises than normal for this time of the year. However, some businesses reported a positive impact as they picked up repair work from storm damage.

February’s small decrease came from a decrease in repair and maintenance (0.5%) as new work saw a slight increase of 0.1% on the month. 

Infrastructure output decreased by 2.5%.

The level of construction output in February 2022 was 1.1% (£155m) above the February 2020 pre-coronavirus level; new work was 3.7% (£354m) below, while repair & maintenance work was 10.2% (£509m) above.

Despite the monthly decrease, construction output rose 2.4% in the three months to February 2022.

Industry comment

Clive Docwra, managing director of property and construction consultant McBains, said: “Today’s statistics are a setback coming after a strong return in output over the last three months. Although Storms Eunice, Dudley and Franklin had an impact on work delays, more serious underlying concerns over factors such as energy price rises, disruption due to the Ukraine crisis and rising inflation are triggering nervousness both from investors and in the construction sector itself.

“One positive is that demand remains strong as new work overall increased slightly, but the government missed a huge opportunity last week to provide a boost to the industry by not introducing measures to improve home insultation in its energy strategy.  Not only would this have helped households with rising energy costs, but a programme of retrofitting work would provide support for smaller players should there be a noticeable downturn.”

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Gareth Belsham, director of the national property consultancy and surveyors Naismiths, said: “For now, this is a wobble rather than a worry. February’s dip in output came after a barnstorming January, and it’s likely the figures were dragged down by the series of exceptionally strong storms that tore across the UK during the month and forced external construction work to cease for several days.

“Nevertheless the output data serves as a wake-up call, and a reminder that there’s nothing inevitable about the momentum that construction built up at the end of 2021 and into January. Construction is highly reliant on global supply chains for building materials, and the imposition of tough sanctions on Russia following its invasion of Ukraine is now disrupting the supply of key materials including steel and timber.

“This data gives a snapshot of UK construction on the eve of war, and the picture it paints is of an industry that was still in a good place, even if it had given up its crown of fastest-growing sector of the UK economy.

“Builders began 2022 with reassuringly full order books, after new orders jumped by an impressive 9.2% during the final quarter of 2021.

“For this reason, industry sentiment remains mostly positive, even if the situation in Ukraine has brought the unwelcome return of material shortages and triggered a new wave of cost inflation.

“Longer delivery times for materials, a chronic shortage of skilled workers and stubbornly high numbers of working days lost to Covid are all proving constant headaches for project managers. Yet the market is at least more free-flowing than it was; and having showed incredible fortitude in the way it dealt with the pandemic and then the post-lockdown supply problems, construction is adapting well to this latest challenge.”

Beard finance director Fraser Johns said: “The February statistics need to be looked at in context. When looking back at a slightly longer-term view, a more positive picture emerges. In the three months to February, construction output grew at its strongest since the summer of 2021.

“The sector has also recovered to the point where output is now above pre-pandemic levels. With the current challenges in the industry, this is an impressive achievement that demonstrates the resilience of the sector.

“The road to recovery is always going to have some bumps along the way, however there were positive signs in February. New orders increased slightly, which is a good measure of customer confidence.

“To continue to build on this positive momentum, the sector will need to overcome some hurdles. The skills shortage is still an issue to overcome, and firms should look at hiring practices to improve diversity in the sector.”

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