March Construction Output Increases by 0.2%

MONTHLY CONSTRUCTION OUTPUT increased by 0.2% in March 2023, according to the latest figures from the Office for National Statistics. This represents a £24 million increase on February 2023.

The increase comes from a rise in new work (0.7%) which was partially offset by a decrease in repair and maintenance (0.6%) on the month.

At the sector level, the main contributors to the monthly increase were infrastructure new work and public other new work, which increased 2.2% and 6.5% respectively.

March’s construction output was 7.3% above the February 2020 pre-Covid 19 pandemic level. New work was 1.8% below, and repair and maintenance was 24.7% above the February 2020 level.

Construction Prices

Annual construction prices, as estimated by the Construction Output Price Index (OPI), decreased to 8.5% in the 12-month period to March 2023. Although the rate of annual price growth has slowed slightly from the record increases seen in both May and June 2022 (10.4%), prices still remain above historic price levels.

Quarterly Construction Growth

Quarterly construction output also increased by 0.7% (£330 million) in Quarter 1 2023. Construction output across Q1 2023 was volatile, with a fall of 1.6% in January 2023, followed by two months of growth in February (2.6%) and March (0.2%).

The quarterly growth came from an increase in repair and maintenance (4.9%), partially offset by a decrease in new work (1.9%).

Seven sectors saw increases in Q1 2023, with private housing repair and maintenance were and non-housing repair and maintenance as the largest contributors. Theses sectors increased 5.7% (£11 million) and 33.9% (£341 million) respectively. There has been continued strength within the repair and maintenance sectors across 2022 and early 2023, with all repair and maintenance sectors increasing on the quarter.

The largest negative contributor was private new housing which fell 5.3% (£543 million).

New Orders

Total construction new orders decreased by 12.4% in Q1 2023 compared with Q4 2022.

The fall in total construction new orders was widespread, with decreases in six out of the seven sectors. The largest contributor to the decrease in Q1 2023 was other new work orders (non-housing) which fell by 9.7% (£874 million). This mainly came from private commercial new orders, which decreased by 22.3% (£773 million) and was driven by falls in office and entertainment projects. Infrastructure also fell, decreasing 8.2% (£183 million). Public new work saw the only increase, rising 11.1% (£177 million) in Q1 2023.

Housing new orders saw a decrease of 18.5%. This mainly came from private housing, which saw a fallback from Quarter 4 2022. Public housing new orders also contributed to the overall decrease, falling 19.7% (£89 million).


Clive Docwra MD of McBains

Clive Docwra, managing director of property and construction consultancy McBains, said: “The modest increase in output will provide a measure of good news for the construction industry, especially given a large proportion of work during the month would have been impacted by it being the wettest March for more than 40 years. 

“But the private housing and commercial sectors are still weak, with the 0.2% increase in output being largely down to other work sectors. The picture in the housebuilding market in particular is not surprising, because although reports elsewhere show house prices are rising which would normally trigger an increase in construction activity, most developers are still planning to reduce by about a quarter the number of homes they planned, and further land purchase is also on hold until the economic forecast becomes clearer. 

“More generally, cost pressures and materials shortages seem to be stabilising, but it’s too early to say whether this represents a longer-term recovery, especially given the ups and downs of the last three years.  This is reflected by the first quarter figures of 2023 showing total orders decreased by more than 12 per cent compared with the final quarter of 2022.” 


>> Read more construction data in the news

The post March Construction Output Increases by 0.2% appeared first on Roofing Today.

Generated by Feedzy