Construction output increases but concerns about housebuilding remain

Monthly construction output is estimated by the Office for National Statistics to have increased 2.4% in volume terms in February 2023; this follows a 1.7% fall in January 2023, with February 2023 being the highest monthly value in level terms (£15,558 million) since records began in January 2010.

The increase in monthly construction output came from increases in both repair and maintenance (4.5%) and new work (1.1%) on the month.

Anecdotal evidence suggested several reasons for the increase in February 2023; it was partially driven by a bounce back from the fall in January 2023, but also continued strength across repair and maintenance sectors; many firms also noted an improvement of weather in February, which allowed them to get more work done.

At the sector level, eight out of the nine sectors saw a rise in February 2023, with the main contributors to the monthly increase seen in private housing repair and maintenance, and non-housing repair and maintenance, which increased 5.0% and 3.7%, respectively.

Alongside the monthly increase, construction output saw an increase of 0.9% in the three months to February 2023; this is the sixth period of consecutive growth in the three-month-on-three-month series; the increase came solely from a rise in repair and maintenance (3.1%), as new work saw a decrease (0.5% fall).

The main positive contributors to the increase in the three months to February 2023 were non-housing repair and maintenance (5.5%) and infrastructure new work (2.8%); with the main negative contributor being private new housing (4.4% fall), despite the increase on the month; anecdotal evidence suggested a general slowdown in housing across recent months.

However, the fall in housing activity reported in the latest ONS data is further evidence about the growing housing crisis, says the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB said: “A drop of 4.4% in housing activity in February should be a worrying signal to the Government that its housing policy isn’t working. At a time when our housing need is at its greatest, we are building fewer homes. That can’t be right. We need a long-term plan to build and meet the country’s housing needs.

“The Government needs to get house building out of planning purgatory by simplifying the planning system and directing funding to local authority planning departments to help them take on and train more planning staff.”