New work boosts construction output

Latest data from the Office of National Statistics (ONS) has revealed construction output grew by 0.6% in Q3 2019, as a rise in new work helps the industry dodge further falls

Construction output growth in Q3 2019 was driven by a rise of 1.4% in new work but was offset slightly by a fall in repair and maintenance of 0.8%.

In new work, most sectors saw an increase with private housing (1.8%), private commercial (1.5%) and private industrial (7.2%) contributing significantly to the hike.

In repair and maintenance, the fall was driven by a 3.0% decline in private housing and to a lesser extent a decline of 0.3% in non-housing.

Construction output increased by 0.6% in Q3 2019 compared with the previous quarter, partially reversing the decrease of 1.2% in Q2 2019.

The industry has experienced a slightly positive trend in growth in the all work series since the start of 2017; however, this is noticeably slower growth in comparison with the period prior to 2017.

In the monthly series, construction output decreased by 0.2% in September 2019, reversing the 0.1% growth seen in August 2019.

For new work in September, all sectors experienced relatively small monthly increases and decreases, apart from infrastructure, which had growth of 6.2% and private industrial new work, which experienced a decrease of 5.9%.

The decrease of 2.1% in repair and maintenance was comprised of falls in all sectors. The largest contributors to the fall in September 2019 were from private housing repair and maintenance work (2.5%) and non-housing repair and maintenance work (1.8%).

Commenting on the latest construction output figures, Scape Group chief executive, Mark Robinson, said: “It’s very promising to learn that new work increased by £253m over the third quarter of this year despite the prolonged period of political turmoil.

While the UK has avoided a recession by the skin of its teeth, there is still a long way to go until we experience any kind of bounce back in business optimism and we still need to see the government seriously commit to propping up industry skills and funding in the lead up to January 31st and beyond.

“Both Sajid Javid and John McDonnell have committed huge amounts of money to infrastructure spend over the past few days, but this ‘war on spending’ has highlighted the huge disconnect between both parties and what is happening on the ground. ‘

“Shovel ready projects take years to prepare and snap decision-making will likely see us making unwise commitments to projects that will become unviable down the line.

“Both Chancellors should focus on rectifying the stop-start nature of project work and commit to completing current infrastructure projects, such as Crossrail and HS2.”

Nationwide Sureties in association with Engage.


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