Construction output up 5.8% in March

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Construction output increased by 5.8% in the three months leading to March 2021, the largest monthly growth since July 2020, according to the latest ONS figures

The level of construction output in March 2021 was £14,251m – the highest since September 2019 when it was £14,381m.

Infrastructure and private new housing were the only new work sectors where the level of output in March 2021 was above the February 2020 level.

Public housing was the only repair and maintenance sector in March 2021 below its February 2020 level of output.

Repair and maintenance work grew by 4.4% (£222m) in March 2021 because of increases in all repair and maintenance sectors – the largest contributor was a 7.7% (£144m) growth in private housing.

New work grew by 2.8% (£705m) in Quarter 1 2021, largely because of infrastructure and private new housing, which grew by 4.3% (£242m) and 2.7% (£230m) respectively.

Proof of the construction sector’s continuing resurgence

Clive Docwra, managing director of property and construction consultancy McBains, said: “With order books steadily being filled as confidence returns and the industry recovers from the downturn over the previous year.  

March represents the largest monthly growth since July 2020 when output grew by 17.8%. Private new housing has been a key driver, and a landmark has been reached with output now above pre-pandemic levels.

“One slight reservation is that while new contracts continue to come in, construction firms are being squeezed by soaring prices of imported materials, notably concrete, steel and timber.

“With margins already tight, the rising cost of raw materials threaten to negate any profit gains, so many construction firms remain on a knife-edge.

“These increasing costs also serve as a warning sign of global inflationary pressures, which could derail any sustained longer term growth.”

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