Construction output falls by 0.2% before COVID-19 outbreak

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Construction output
© Michael Piepgras

Driven by a 1.7% fall in repair and maintenance work, construction output fell by 0.2% in the three months to February 2020, according to the latest ONS figures

Construction output fell by 0.2% in the three months to February 2020, compared with the previous three-month period.

New work increased in the three months to February 2020, driven by growth in infrastructure and public other new work, which grew by 2.8% and 4.5% respectively. No other new work sectors saw growth.

In repair and maintenance, the fall in the three months to February 2020 was driven by a 5.6% fall in private housing repair and maintenance – the largest fall in this series since October 2012. In contrast, public housing and non-housing repair and maintenance increased by 2.2% and 0.1% respectively.

Construction output fell by 1.7% in the month-on-month all work series in February 2020. This fall was driven by a 3.4% fall in new work, which more than offset 1.7% growth in repair and maintenance – this is thought to have been impacted by the adverse weather experienced throughout February 2020.

Disappointing figures

Clive Docwra, managing director of McBains, said: “These figures are a worrying sign of sluggishness in the construction sector, which was already evident before the coronavirus outbreak.

“Output decreased by 1.7% in February – the largest fall in monthly growth since October 2019.  In particular, the drop in private new housing, which fell 7.7% on the previous month, is a cause for concern as it is the second-largest fall since monthly records began in 2010.

“The bad weather in February was clearly a factor, but the more ominous sign on the horizon is the impact of COVID-19.

“On the back of these disappointing figures, the industry is bracing itself for a severe downturn over the next few months, with COVID-19 already resulting in empty sites and a significant proportion of planned investment on hold.

“This is the first time the industry has experienced three consecutive monthly falls since March 2018.  It means the industry will not have a cushion to fall back on which the impact of the pandemic really bites. The sector is also more affected than many other industries as most staff are unable to work from home.”

COVID-19 impact

The data collection for the period was completed by 29 February and is largely unaffected by recent developments with by the COVID-19 pandemic.

In its statement, ONS said: “We are aware of the upcoming challenges relating to the pandemic outbreak, particularly for construction output, which will be impacted by closures of worksites and premises.

“The monthly construction output questionnaire is currently collected via paper, however, like other ONS business surveys, plans are being made to move the questionnaire to online data collected. This means that construction firms can log on from any location and submit their data at an appropriate time. The current plan is to collect these data via online data collection for the first time in the April 2020 release.”

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