Monthly construction output is estimated to have decreased by 0.4% in volume terms in July following an increase of 0.5% in June, according to the latest data from the Office for National Statistics (ONS).
The decrease in monthly output was caused by falls in new work (0.2%) and repair and maintenance (0.7%). Five of the nine sectors tracked experienced monthly output falls with the main contributors to the monthly decrease coming from private commercial new work and private housing repair and maintenance, which fell by 2.4% and 1.7%, respectively.
Construction output is estimated to have grown by 1.2% in the three months to July due to increases in new work (1.6%) and repair and maintenance (0.8%).
Clive Docwra, managing director of property and construction consultancy McBains, said: “After May and June’s figures showed an increase in output, the construction industry was expecting better news for July. Despite a modest overall decrease in growth, the industry will flag a dip in growth in five of the nine work sectors as a concern, particularly the 2.4% drop in private commercial new orders.
“Although the figures may not show a post-election bounce, the optimism created by the new government’s announcements on housebuilding means the industry is feeling optimistic for the medium term, borne out by today’s figures showing output grew 1.2% in the three months to July. Some early signs of intent from the government on how issues such as confirmation of how nationals planning frameworks can be streamlined, and measures to boost growth in the budget, will further bolster confidence.”
Terry Woodley, MD of development finance at Shawbrook, added: “The construction sector continues to face challenges, with the latest figures showing a further decline in activity for July. Despite the warmer weather, construction remained sluggish, with rising costs for materials and labour, compounded by the naturally slower summer holiday period. However, there are signs of recovery in certain areas, particularly in new work and infrastructure, which helped mitigate a more significant drop in overall activity.
“As we approach the autumn budget, property developers will undoubtedly be closely watching for any new developments. The government’s recent plans to increase housebuilding targets and relax planning restrictions have been welcomed, contributing to a more optimistic long-term outlook for the sector.”
