Monthly construction output is estimated to have decreased 0.5% in volume terms in July following a 1.6% increase in activity in June, according to the latest figures from the Office for National Statistics (ONS).
The ONS said the decrease in output came solely from a 1.3% fall in repair and maintenance work, with new work increasing 0.1% on the month.
Five out of the nine sectors experienced a fall in July 2023, with the main contributors to the monthly decrease being private housing repair and maintenance, and private housing new work, which decreased 3.9% and 2.2%, respectively.
The ONS said anecdotal evidence suggested heavy rainfall and lower than average temperatures in July had resulted in delays to planned work, coupled with a continued slowdown in the housing sector.
Clive Docwra, managing director of property and construction consultancy McBains, said: “Following the positive June figures which showed a return to growth after two successive monthly falls in output, the construction sector will feel it’s back to square one with today’s news. A significant factor is high mortgage rates denting demand for new homes, reflected by the continued sluggish performance in volume housebuilding.
“My guess is that we could see more private housebuilders forging closer partnerships with local authorities and housing associations to pursue mixed tenure models such as social housing and shared ownership, which are less impacted by volatility in the wider property market. Our clients also tell us that even though building material prices are falling, this is taking time to feed through the supply chain, putting a further squeeze on delivery.”
