Monthly construction output increases, says ONS

Monthly construction output is estimated to have increased 0.2% in volume terms in March 2023; this came from an increase in new work (0.7%), partially offset by a decrease in repair and maintenance (0.6% fall) on the month.

This followed a growth in construction output of 2.6% in February 2023 (revised up from a 2.4% growth in the previous publication).

At the sector level, four out of the nine sectors saw a rise in March 2023, with the main contributors to the monthly increase seen in infrastructure new work and public other new work, which increased 2.2% (£51 million) and 6.5% (£48 million), respectively.

Quarterly construction output increased 0.7% in Quarter 1 (Jan to Mar) 2023 compared with Quarter 4 (Oct to Dec) 2022; the increase came solely from a rise in repair and maintenance (4.9%), as new work saw a decrease of 1.9%.

Total construction new orders decreased 12.4% (£1,571 million) in Quarter 1 2023 compared with Quarter 4 2022; this quarterly fall came mainly from private commercial and private housing new orders, which fell 22.3% (£773 million) and 18.4% (£607 million), respectively.

The annual rate of construction output price growth was 8.5% in the 12 months to March 2023; this has slowed slightly from the record annual price growth found in May and June 2022 (10.4%).

The new ONS figures followed the fastest fall in house building activity since May 2020, according to the latest data from S&P Global / CIPS UK Construction PMI.

The rapid decrease should be an alarm bell to the Government to sit up and take action, says the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB said: “For too long we have not been building enough homes to address the growing housing crisis resulting in overcrowding and young people not being able to afford to get on the housing ladder. The Government needs to recommit to building 300,000 every year and give hope to both consumers and house builders alike that it is serious about increasing the supply of new homes.

“What is very concerning is that the Government lacks a clear plan to solve the housing crisis with the result that the housing market continues to soften, house prices increase, and more and more people are stuck in rented accommodation. While there are plenty of complex issues holding back house building, fundamentally we just need the Government to get to grips with delivery and allow more local housebuilders to deliver high quality homes fit for their communities.”