Construction output rises following dip in December

construction output

Construction output grew by 0.9% in January following a 2.9% dip in December, according to the latest ONS figures

In the month-on-month all work series, construction output grew by 0.9% in January 2021.

The level of output in January 2021 was 2.6% below the February 2020 level, new work was 6.4% below this level, while repair and maintenance work was 4.5% above this level despite a monthly fall.

New work increased by 1.7% in January 2021 and was driven by private commercial and infrastructure, which grew by 4.5% and 3.1% respectively.

Repair and maintenance decreased by 0.4% in January 2021 because of a 4.7% fall in private housing repair and maintenance, despite growth of 5.0% in public housing and 1.3% in non-housing repair and maintenance.

Construction output grew by 1.7% in the three months to January 2021 compared with the previous three-month period, thanks to growth in both new work (2.2%) and repair and maintenance (0.8%).

‘The construction industry is cautiously optimistic’

Commenting on the new construction output figures, Clive Docwra, managing director of McBains, said: “As the end of lockdown hopefully draws nearer, these statistics provide further evidence that the construction industry is cautiously optimistic about its ability to bounce back after what was an incredibly difficult 2020.

“January’s growth of 0.9% could be significant given it is traditionally a quiet month in the calendar for construction, and is certainly a welcome sign of the industry’s resilience particularly in light of December’s 2.9% fall in output.

“It’s especially encouraging to see growth in most sectors, notably 4.5% in private commercial work and 3.1% in infrastructure, which suggests that investors are returning and confidence in the economy may be picking up.

“However, it remains too soon to tell what the long-term impacts of Covid-19 will be, with output still 2.6% below February 2020 levels.”

Andrew Shepherd, managing director at TopHat, added: “One urgent requirement for Britain’s post-pandemic recovery will be ensuring that there is a growth in jobs. Construction certainly has a role to play here, but as is well known the sector has been facing a skills shortage for years now which will be hard to reverse quickly. This is where modular housing can step in and help provide jobs across the skills spectrum and in areas of the country that the government wants to level-up.

“If support for modular housing sees the sector grow, some reports reckon it could provide 50,000 high productivity and quality jobs. For context, that’s nearly a third of jobs directly involved in car making.

“Compared to the automotive industry, modular housing in the UK is still in its infancy. If supported and nourished, it could become a major employer. And even better for the government, it could provide those jobs across the UK, helping the drive to level up the country.”


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