UK construction output is estimated to have increased by 0.5% in Q4 2024 compared with activity in Q3, according to the latest data from the Office for National Statistics (ONS).
The increase was solely due to a 1.2% rise in new work as repair and maintenance work fell by 0.4%.
Monthly construction output is estimated to have fallen by 0.2% in volume terms in December 2024 thanks to a 1.8% fall in repair and maintenance work – new work grew by 1.1%.
At the sector level, five out of the nine sectors fell in December 2024. The main contributors to the monthly decrease were non-housing repair and maintenance, and private housing repair and maintenance, which fell by 1.8% and 1.4%, respectively.
Total construction new orders fell by 2.4% (£231m) in Q4 2024 compared with Q3 thanks to infrastructure new work and private industrial new work falling by 23.5% (£496m) and 19.7% (£197m) respectively.
Annual construction output increased by 0.4% in 2024 compared with 2023 – the fourth consecutive year of annual growth.
Clive Docwra, managing director of McBains, said: “There will be little surprise among the industry that December witnessed a fall in output, given the ups and downs of the previous 11 months. Despite the disappointing December return, the industry will take heart that new work orders actually grew during the month, but more importantly the fourth quarter of 2024 saw half a percentage rise in output, which is more than perhaps many expected. It means a number of industry sectors will be looking forward with a degree of optimism in terms of the next few months.
“In particular, the recently published planning reforms and falling interest rates will hopefully inject new momentum into the housebuilding sector, although skills shortages and cost inflation on materials could still have an impact on significant growth across work sectors.”
Terry Woodley, MD of development finance at Shawbrook, added: “The construction sector ended the year on a high, with Q4’s figures showing a quarterly increase in activity, despite a month-on-month decrease. Moving into the new year, green shoots are poking through and prompting improved confidence levels in developers. Further clarification of the government’s next steps for reducing planning red tape and boosting housebuilding has been released, making developers feel more supported and hopeful for 2025.
“However, challenges with recruitment and supply chains have emerged in recent months and will need to be addressed if construction output is to truly bounce back this year. As we approach the Spring Statement, developers should continue to keep an eye out for any further updates from the government.”
