Construction output figures reflect ‘underlying resilience’ of sector

Latest ONS figures show output grew by 2.5% in 2019, compared to 0% growth in 2018.

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Total construction output in the UK showed an increase of 2.5% in 2019, according to official figures by the Office of National Statistics (ONS).

In a breakdown of reports, construction output increased by 0.5% from Oct to Dec 2019 compared to July to Sept 2019 – driven by a 0.8% growth in new work, which offset a 0.1% fall in growth in repair and maintenance.

According to ONS, the rise in new work was because of growth in all sectors apart from private new housing and public other new work, both of which fell 1.1%.

The largest positive contributions came from private commercial and public new housing, which grew by 2.5% and 8.4% respectively.

In repair and maintenance, the 0.1% fall in 2019 was said to be driven by a 2.9% decrease in private housing repair and maintenance.

In comparison, non-housing and public housing repair and maintenance grew 1.6% and 0.9% respectively.

According to reports, construction output increased by 0.4% in the month-on-month all work series in December 2019 – driven by a 0.8% growth in new work which offset a 0.4% fall in repair and maintenance.

When compared with 2018, the level of all work in 2019 saw a 2.5% increase; this was predominately driven by a 3.4% growth in new work and, to a lesser extent, a 0.7% increase in repair and maintenance.

New orders also grew by 4.4% in October to December last year – driven by an 11.2% rise in all other work but offset by an 8.5% fall in new housing.

Clive Docwra, Managing Director of leading construction consulting and design agency McBains said that the figures are a sign of the “real potential” of UK construction in 2020.

“It shows overall output increased again, albeit more slowly, in the final three months of last year by 0.5%. This was driven by growth in new work, which offset a small reduction in repair and maintenance work”, he said.

“Private commercial and public new housing, which increased by 2.5% and 8.4%, were big factors in the rise in new work. Less positive, was the fall in private new housing, which dropped 1.1%.

“More than anything, these figures reflect an underlying resilience in the sector – given that they cover a tumultuous political period at the end of 2019.

“Still, we’re not entirely out of the woods. The government has offered little in the way of detail on what the UK’s future relationship with the EU will look like, and stoked anxiety by ruling out any extension to the negotiations beyond December 2020.

“Until the sector can see what the future entails with our nearest trading partner, and key source of skilled labour, confidence and funding towards new projects is likely to be stymied”, he added.

Commenting on the statistics, CEO of the Federation of Master Builders (FMB), Brian Berry said: “Despite toxic uncertainty, political ups and downs and bad weather in 2019, it is a testament to the resilience of the construction sector that it grew by 2.5% last year.

“However, the positive overall figure for last year shouldn’t mask the disappointing performance of the repair and maintenance sector which saw minimal growth of 0.7% and a fall of 1.7% in private housing repair and maintenance.

“A national retrofit strategy would help boost the domestic repair and maintenance sector, providing confidence and support to homeowners and builders to make the necessary upgrades to our ageing housing stock.

“At this same time, this would help to reach net-zero emissions by 2050.”

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