The Office for National Statistics (ONS) has released its construction output report for August 2023, revealing an over decline in productivity
During August, monthly construction output declined by 0.5% compared to the previous month, following a revised decrease of 0.4% in July 2023. Construction output in August amounted to £15,584m.
This decline in monthly output was largely driven by a 1.5% reduction in new construction work, although it was partially offset by a 1.0% increase in repair and maintenance projects during the same period.
The housing sector continues to struggle
According to the ONS report, five out of the nine sectors saw a decrease in August 2023. The main contributors to this monthly decline were the private commercial and private new housing sectors, which saw reductions of 4.1% and 1.4%, respectively.
Despite the monthly decrease, the broader picture showed a 0.9% increase in construction output over the three months leading up to August 2023. This growth can be attributed to new construction work, which increased by 0.9%, and repair and maintenance projects, which also saw a 0.9% rise.
Industry leaders blame HS2 cuts for the decline in construction output
“This second successive monthly fall in output comes as little surprise. Recovery in the sector still looks some way off while interest rates remain high and caution is still the watchword for many investors, especially in the critically important housebuilding sector where demand remains dampened,” commented Clive Docwra, managing director of property and construction consultancy McBains.
“Longer-term, the scaling back of HS2 is also likely to have a knock-on effect in terms of new commercial and infrastructure contracts further down supply chains, so the outlook is now increasingly uncertain in other work sectors too,” he concluded.
