UK construction output fell for the third consecutive month in a row in May, according to the latest figures from the Office for National Statistics (ONS).
Output fell by an estimated 0.2% to £15,360m in value terms solely due to a 0.4% decrease in new work, with repair and maintenance work (0.0%) being flat on the month.
Four out of the nine sectors saw a fall in May 2023, with the main contributors to the monthly decrease seen in non-housing repair and maintenance and private housing new work, which decreased 2.5% and 1.7%, respectively.
The ONS said anecdotal evidence continued to indicate a slow-down in private housing, referencing customers’ economic worries. However, some businesses across other sectors reported an easing in inflation.
In the three months to May 2023, construction output increased 0.2% – the ninth period of consecutive growth in the three-month-on-three-month series. However, this is the weakest growth since the decrease in the three months to August 2022 (0.1% fall). The quarterly increase was solely due to the rise in repair and maintenance work (2.5%), as new work decreased 1.3%.
Clive Docwra, managing director of McBains, said: “After the construction industry experienced a decrease in output in the two previous months, today’s statistics confirm that many work sectors are struggling to attract new orders.
“Private housebuilding in particular is still in the doldrums and the low activity is having a big impact on overall confidence within the construction sector. The fall in output in May should be kept in perspective as estimates show growth is increasing over the medium term, but given this is the weakest growth since August last year, the industry is still a fair way from recovery.”
Terry Woodley, managing director of development finance at Shawbrook Bank, added: “Economic uncertainty, stickier inflation and rising interest rates continue to hamper activity and cause headaches for developers. However, with an increasing shift back towards office working and an urgent need for quality housing, challenges are likely to be short lived.
“As more employers encourage a return to the workplace, a renewed need for office space is seeing companies race to refurbish existing offices or review their needs for additional space.
“Meanwhile, new housing is high on the agenda for developers, as the UK continues to suffer from a lack of quality supply to meet heightened demand. This is making new builds an increasingly attractive proposition, though opportunity still remains in existing property. With many properties requiring refurbishment to meet future EPC efficiency regulations, builders and developers should expect a steady uptick in activity for the months to come.”
