Construction new work activity fell 2% in 2023

Construction new work contracted by 2% last year as the slowdown in house building dragged the industry down.

But despite the fall in new work activity, a sharp 8.3% rise in RMI work managed to lift the industry’s overall output into positive growth of 2% last year.

Latest figures from the Office for National Statistics this picture was mirrored in the latest quarterly construction output figures today, which fell by 1.3% in Q4 compared with Q3.

The decline came solely from a decrease in new work (-5%), as repair and maintenance increased by 4%.

Latest figures for new orders in the final quarter of last year were also a cause for concern.

Total construction orders decreased by 13% compared to Q3, the lowest level of total construction new orders since Q2 2020, when coronavirus lockdown restrictions were in place.

The fall mainly came from private commercial new orders, which decreased by 18%, and private industrial new orders, which saw a decrease of 28%.

Annual construction output price growth slowed in December to 3.1% compared with the record increases seen in May and June 2022 of 10.7%.

Clive Docwra, managing director of property and construction consultancy McBains, said: “Today’s figures represent a serious blow for the construction industry, coming off the back of two previous months of falling output.

“It’s now crunch time for the sector with the UK economy entering recession in the final quarter of last year.

“In recent months a fall in new house building has been a big factor in the decrease in growth, but today’s figures show new infrastructure work – which for a long while has propped up the sector – also drying up.

“While interest rates remain high and the economic picture continues to be unpredictable, we expect the overall outlook for 2024 to be one of uncertainty.

“The hope is that next month’s Budget statement by the Chancellor includes some measures to provide some impetus to the sector.”

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