Construction output dropped for the fifth consecutive month in August as the industry’s ongoing supply chain issues continue, according to the latest ONS figures
Construction output in August dropped to 1.5% below February 2020 pre-pandemic levels, according to the latest ONS statistics.
ONS figures show that new work remained flat this month, whilst repair and maintenance work fell by 0.6%. The report suggests that product shortages caused by supply chain issues and subsequent price rises were the reason for the decline.
The level of construction output in August 2021 was 1.5% below the pre-pandemic levels; whilst new work was 3.7% below the February 2020 level, repair and maintenance work was 2.7% above February 2020 levels.
The recovery to date is mixed at a sector level, as infrastructure continues to show increased performance at 45.4% above pre-pandemic levels.
Private commercial continues to fall below retrospective February 2020 levels at 26.3% in August 2021.
Alongside the monthly fall, construction output fell 1.2% in the three months to August 2021 – the first three-monthly fall since July 2020, driven by a fall in repair and maintenance of 4.7%.
‘Construction sector is in a downward spiral’
Commenting on August’s construction output figures published by the ONS today, Clive Docwra, managing director of McBains, said: “Today’s figures are proof that the construction sector is in a downward spiral, as this is the fifth successive monthly fall in output.
“New work remains flat in due in large part to a continuing shortage of essential products such as steel, concrete and timber. Steel prices are now almost 75% higher than they were in August 2020.
“The outlook over the remainder of the year looks ominous too. The triple whammy of continuing supply chain issues, together with a lack of HGV drivers to deliver the materials that are available, means some developments being delayed, and the fuel and energy crisis is also likely to add to project costs.
“Skills shortages are also a concern, so the government should grant an exemption allowing skilled foreign construction workers to apply for work visas, as they did to address the shortage of HGV drivers.”
‘A telling loss of momentum across the construction industry’
Mark Robinson, group chief executive at procurement body SCAPE, commented: “A decline in output highlights a telling loss of momentum across the construction industry, as energy costs, labour shortages and fast-rising material prices continue to paint a concerning picture heading into winter.
“With attention turning to this month’s Budget and Spending Review, the industry will be considering how best to mitigate these challenges when it is handed the baton to deliver more of the community-focused regeneration needed to deliver on the government’s ‘Levelling-Up’ ambitions.”