Repair work slows, causing monthly construction output to fall

Construction output has fallen after five consecutive months of growth, figures from the Office for National Statistics (ONS) reveal.

Following a surge in March driven by increased repair works after major storms, output decreased by 0.4 per cent in April, or £58m. It was the first monthly decline since October last year.

Lower levels of private housing repair and maintenance work, and private commercial new work, were the main drivers behind the slump, according to the ONS. They decreased by 6.5 per cent and 3.8 per cent respectively.

Construction experts have said the monthly ONS figures highlight the “changeability” that remains within the construction industry, expressing disappointment at the decline.

But there was some positive news as output increased 2.9 per cent in the three months to April 2022 – the sixth consecutive growth in the three-month on three-month series.

Overall, the level of construction output in April was 3.3 per cent, or £481m, above the February 2020 pre-COVID 19 level.

Storms in February created a positive impact for the industry, with businesses picking up repair and maintenance work caused by damage. But the ONS said a “fallback” on this had been suffered as work fell 2.4 per cent.

The fall in private housing repair and maintenance work, along with private commercial new work represented a combined decrease of £215m for April.

Issues sourcing certain construction products also remain a problem, according to the ONS, which reported that high costs for concrete and timber affected smaller-sized businesses in particular.

Despite the monthly decline in output, April’s construction level output was still 3.3 per cent, or £481m, above the February 2020 pre-pandemic level.

Commenting on today’s ONS construction output for April, Assetz Group chief executive Stuart Law said: “This month’s construction output figures highlight the changeability which remains within the construction industry.

“Whilst many were expecting to see continued growth, it is disappointing to see output decrease. Yet this reflects the macroeconomic factors that are continuing to constrain the sector.

“High inflation continues to increase the cost of raw materials and energy, whilst the ongoing conflict in Ukraine and Russian sanctions are pushing up prices further and hindering the supply of key materials. This is further aggravated by disrupted supply chains and labour shortages.”

Since the fall at the start of the coronavirus pandemic, recovery for the sector has been mixed. In April, infrastructure was 35.6 per cent (£669m) above respective levels for February 2020, while private commercial was 27.2 per cent (£676m) below.

Beard Construction finance director Fraser Johns said: “On the face of it, the sector is on a continuing road to recovery, albeit a tentative one.

“We should not be concerned by the small monthly decline in output volume. This is a re-balancing of the figures after they were temporarily inflated in March by a rise in demand for repair work after the winter storms.

“Instead, we should focus on the bigger-picture Q1 output, which shows a more encouraging 2.9 per cent growth for the sector with April output more than 3 per cent above pre-COVID 19 levels.

“That said, the drop in private commercial work to more than 25 per cent below pre-COVID levels is a reminder that, for some areas of the sector, the recovery remains fragile.

“As the year unfolds and growing inflation carries on pushing up material prices, continued recovery will rely on open and honest conversations between main contractors, customers and the supply chain to ensure the cost plans for delivering schemes are both robust and realistic for all parties.”

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