Positive RMI growth propping up falling construction activity, says FMB

Construction output saw a decrease of 0.6% in the three months to November 2023; this came solely from a decrease in new work (3.6% fall), as repair and maintenance increased by 3.8%, according to the latest ONS figures.

Monthly construction output is estimated to have decreased 0.2% in volume terms in November 2023; this follows an upwardly revised decrease of 0.4% in October 2023, with the monthly value in level terms in November 2023 at £15,571 million.

The decrease in monthly output came solely from a decrease in new work (2.0% fall), as repair and maintenance increased by (2.1%).

At the sector level, three out of the nine sectors saw a fall in November 2023, with the main contributors to the monthly decrease seen in private new housing and infrastructure new work, which decreased 3.9% and 2.0%, respectively.

Anecdotal evidence suggested effects of adverse weather, including heavy rainfall and strong winds in November 2023, led to delays in planned work.

Brian Berry, Chief Executive of the FMB said: “November once again marks another month of decline in construction industry output. While it is positive that the RMI sector, which makes up the backbone of the sector, has seen significant growth of 2.1%, this cannot be a substitute for the delivery of new projects.

“The Private New Housing sector and the Infrastructure New Work sector have both seen sharp declines, which is deeply concerning for the long-term sustainability of the wider industry.

“The UK is experiencing a housing crisis, and yet the Government’s response to date has been limited. Despite positive first steps being taken by the Chancellor, the measures announced by the Government so far go nowhere near far enough to tackle the challenges the UK faces in delivering the vast increase in high-quality housing that the country needs.

“We need to see serious action delivered as an urgent priority, as papering-over cracks can never be a viable solution in the long-term.”