The 2% fall in repair, maintenance and improvement work in the building industry, as announced in the latest ONS figures on construction output in Great Britain, reflects reduced consumer spend as a result of the higher cost of living, says the Federation of Master Builders (FMB).
Monthly construction output increased by 0.4% in volume terms in August 2022, which is the second consecutive monthly growth following the upwardly revised increase to 0.1% in July 2022; according to the latest data.
August 2022 is the second highest monthly value in level terms (£15,011 million), with May 2022 remaining at the highest level since records began in January 2010 (£15,035 million).
The increase in monthly construction output in August 2022 came solely from an increase in new work (1.9%), as repair and maintenance saw a decrease (2.0%) on the month.
At the sector level, the main contributors to the increase seen in August 2022 were infrastructure, private industrial and private housing new work, which increased 5.3%, 4.3% and 1.7%, respectively.
Brian Berry, Chief Executive of the Federation of Master Builders (FMB) said: “(The) figures showing a 2% drop in repair maintenance and improvement (RMI) work highlight the real term effects of a contracting economy. This is the third consecutive monthly decline in RMI work, which is the backbone of the construction industry and is often an early indicator of what’s to come for the wider sector.
“Small local builders are under increasing pressure to keep their bottom lines in the black, as cash strapped consumers hold back on new projects ahead of a difficult winter period. The Government needs to set out the detail of their pro-growth agenda to help restore confidence in the economy.
“A win-win would be a nationwide energy efficiency plan to make our homes more energy efficient, which boosts jobs and lowers bills. A more immediate shot in the arm would be a reduction in VAT on RMI work, helping builders pass on savings to customers.”
The level of construction output in August 2022 was 3.2% (£461 million) above the February 2020 pre-coronavirus (COVID-19) level; new work was 0.7% (£69 million) below its February 2020 level, while repair and maintenance work was 10.6% (£530 million) above the February 2020 level.
Alongside the monthly increase, construction output saw a slight increase of 0.1% in the three months to August 2022; this came solely from an increase seen in new work (1.6%) as repair and maintenance saw a decrease (2.4%), this is the tenth consecutive period of growth in the three month on three month series, however it is the slowest rate of growth since the three months to October 2021 that saw a fall of 0.7%.
In this month’s release, the earliest period open to revision is January 2011, and this is the first time the monthly path has been published that is consistent with the Quarter 2 (Apr to June) 2022 quarterly national accounts published on 30 September 2022.
