UK construction output increased in January following three consecutive months of falling output, according to the latest figures from the Office for National Statistics (ONS).
Monthly construction output is estimated to have increased 1.1% in volume terms in January thanks to increases in new work (1.1%) and repair and maintenance work (1.2%).
Six out of nine sectors tracked experienced a rise in output with the main contributors being private new housing and non-housing repair and maintenance, which increased 2.6% and 1.9%, respectively.
Over the three months to January 2024, construction output is estimated to have decreased 0.9% solely due to the 4.5% fall in new work.
Clive Docwra, managing director of McBains, said: “After three consecutive months of falling output, the industry will welcome January’s return to growth. The 2.6% increase in private housing is particularly encouraging given the performance of this sector over the last few months. The hope is that if mortgage rates ease, it could lead to increased residential demand which in turn could trigger a bigger turnaround in housebuilding numbers.
“But whether the increase in January turns out to represent the green shoots of wider recovery or a blip remains to be seen. Growth over the longer term is estimated to have decreased 0.9% in the three months to January 2024, highlighting that conditions remain unsettled for many industry sectors.”
Terry Woodley, managing director of development finance at Shawbrook, added: “The latest ONS figures showing a decrease in construction activity in the three months to January are balanced by a welcome uptick in construction activity month on month. While falling inflation offers some relief, it may not have been enough to fully offset the headwinds the industry faces. This could delay the potential boost to housebuilding anticipated from softening mortgage rates. Similar to other sectors, commercial construction continues to grapple with supply chain disruptions and weather-related setbacks. Additionally, the lack of specific construction measures in the Spring Budget has further dampened confidence, which could hinder future activity.
“As we approach election season, it will be interesting to see if policymakers prioritise the construction sector and address issues like supply chains and skills shortages. Focusing on areas like brownfield development and sustainable building practices could also be key to a more resilient industry.”
