UK Construction industry output sees a sudden decline

The UK Office for National Statistics has published its figures highlighting that the total construction industry output fell by 0.6% in April 2023, following two months of consecutive growth. This decrease in monthly output could be attributed to a decrease in new work (1.0% fall), and a small offset from increased repair and maintenance (0.1%) during the month.

Five out of the nine sectors across the industry fell in April 2023, with the main causes of the monthly decrease being private housing repair and maintenance which decreased 5.7% (£149mn/US$189mn), and private housing new work which decreased 3.0% (£99mn/US$125.57mn).

Private housing sector construction expected to continue declining

The figures suggest that there is further concern that the housing market is slowing down. The Office of National Statistics has provided anecdotal evidence that suggests a “slow-down” in private housing, with customers having economic worries and therefore not requesting work. 

This news comes after much anxiety with falling house prices, and uncertainty over mortgage lending and home purchases, as reported in the news. It sparks questions over what the demand will be for construction work going forward.

Despite this, however, some companies across other sectors have reported inflation easing. There was a 3.6% monthly increase in infrastructure work, while commercial work increased by 1.3%. Output was increasing and did so by 1.6% in the three months leading up to April 2023, with the increase almost entirely through repairs and maintenance work increasing.

This is the eighth period of consecutive growth in the three-month-on-three-month series.

Clive Docwra, Managing Director of Property and Construction Consultancy company, McBains, said (as reported by PBC Today): “After last month’s figures fuelled hopes of green shoots of recovery, today’s statistics will come as a blow to the construction sector.

“Particularly disappointing was that the fall was a result of a decrease in new work, suggesting that confidence remains low among many big investors. It’s little surprise that private housing continues to struggle, and with falling house prices and low mortgage approval rates, it will take some months before volume housebuilding shows a turnaround.”