Infrastructure and private housing lifts construction output

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Construction output increased by 2.9% in September, driven by growth in both new work and repair and maintenance

This is the fifth consecutive month of growth in the UK’s construction output, but the lowest rise in that time, according to the ONS.

Breaking the data down

The level of construction output in September 2020 was 7.3% below that in February 2020, with only infrastructure and private new housing having returned to above pre-pandemic levels of output.

All other types of work in September have yet to recover, with public new housing the furthest below its February 2020 level at 29.4%.

Quarterly construction output rose by a record 41.7% in Q3 2020 compared with Q2 2020; this was driven by record quarterly growth in both new work (40.8%) and repair and maintenance (43.4%).

The increase in new work in Q3 2020 was thanks to record quarterly growth in all new work sectors – the largest contributor was private new housing, which grew by 84.4%.

The increase in repair and maintenance was due to record growth in all repair and maintenance sectors – private housing repair and maintenance rose by 70.9%.

New orders grew by 89.2% in Q3 thanks to a surge in new housing and all other work. Public new housing was the only sector to decline.

The annual rate of construction output growth was 0.4% in September.

Industry reaction

Gareth Belsham, director of Naismiths, said: “No other industry can match construction for the sheer white-knuckle severity of its decline, and then meteoric recovery.

“After coming to a halt for much of the second quarter, output across the industry rocketed by 41.7% in the third quarter of the year, and it continues to grow faster than any other sector of the economy.

“The industry as a whole remains 7.3% adrift of its pre-pandemic level, but its two hottest subsectors – private housebuilding and infrastructure – have now rebounded completely.

“With the Prime Minister putting construction front and centre of his recovery plan, the industry is stepping up admirably. With work now underway on a swathe of new infrastructure projects, infrastructure output was 1.8% higher in September than it was in February.

“Meanwhile housebuilders are being deluged with demand. New orders from private sector developers doubled during the third quarter, rising by a gravity-defying 102.9% compared to the second quarter of the year.”

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