Construction output figures flatline in three months to May

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Construction output, ONS, construction contracts,
© Viorel Dudau

Growth in construction output has flatlined, despite a slight incline in new construction contracts awarded in May 2019, according to the lasted ONS figures

Great Britain construction output figures and construction new orders are designated as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Statistics.

Main points

  • Construction output growth was flat (0.0%) in the three-month on three-month all work series in May 2019; this was because of a fall in repair and maintenance of 0.5% being offset by a 0.3% increase in new work.
  • In new work, the increase in the three-month on three-month series in May 2019 was driven by growth in private commercial new work and public new housing, which saw growths of 2.2% and 8.4% respectively.
  • In repair and maintenance, the decrease in the three-month on three-month series in May 2019 was because of declines in both private and public housing repair and maintenance, which decreased by 2.5% and 3.2% respectively.
  • Construction output figures increased by 0.6% in the month-on-month all work series in May 2019; driven by increases in both new work and repair and maintenance which grew by 0.4% and 1.2% respectively.

Estimates in this release are consistent with the GDP quarterly national accounts, UK: January to March 2019 publication released on 28 June 2019.

The monthly business survey, construction output, collects output by sector from businesses in the construction industry within Great Britain. Output is defined as the amount chargeable to customers for building and civil engineering work done in the relevant period excluding Value Added Tax (VAT) and payments to subcontractors.

This year, because of the very demanding set of changes being put through in the annual update, we are exceptionally not going to fully reconcile 2017 annual data, instead of producing an indicative balance to allow further time for final quality assurance of the data.

Consequently, the reference year and last base year for all chained volume measure series will remain as 2016.

Construction output in May 2019

Construction output figures growth increased by 0.6% in the month-on-month series in May 2019. This month-on-month increase follows two successive declines in the monthly series for March 2019 and April 2019. This increase was driven by growth in both new work and repair and maintenance which grew by 0.4% and 1.2% respectively.

Construction output growth was flat (0.0%) in the most recent three-month period in May 2019, as compared with the three months prior. This reflects a weakness in March and April 2019, which saw declines of 1.5% and 0.5% respectively, followed by relatively slow growth of 0.6% in the most recent month.

It should be noted that the previous three months (December 2018 to February 2019), on which the three-month on three-month growth of 0.0% is based, includes a dip in output figures in December 2018, which recorded the lowest monthly output seen at any point within the last 12 months, and the sharpest monthly fall in the series since March 2016.

May 2019 saw month-on-month growth in both repair and maintenance and new work. For repair and maintenance which increased by 1.2%, we see the reverse picture of that seen in the three-month on three-month series: growth was driven by increases in private and public housing repair and maintenance of 2.9% and 3.8% respectively, while non-housing repair and maintenance fell by 0.7%. Despite this increase, repair and maintenance output levels are still £114m below the monthly record high for the series seen in February 2019.

Figure 3 shows the difference in the three-month on three-month levels from the different construction sectors, taken from our seasonally adjusted, chained volume measure series. Construction output increased by £3m in the period March 2019 to May 2019 in comparison with December 2018 to February 2019. Because of rounding, this resulted in flat growth (0.0%) in construction output for May 2019 in the three-month on three-month series.

Repair and maintenance saw an increase of £54m in May 2019. This month-on-month growth was driven by increases of £50m and £22m in private and public housing repair and maintenance. In contrast, non-housing repair and maintenance decreased, seeing a £17m decline in May 2019.

Detailed growth rates

When looking at the month-on-year series, there has been a growth of 1.7%. This was driven by increases in infrastructure and private new housing of 13.6% and a 6.6%, with a more minor contribution to growth from a 25.8% increase in public new housing. Although a number of series saw declines, most notable contributions came from private commercial new work and private housing repair and maintenance which both fell by 6.8%.

In the three-month on three-month series in May 2019, output growth was flat (0.0%) compared to the three months prior. The most notable contributions were from public other new work, which fell by 9.0% (the largest decline in that series since May 2012), and private commercial new work, which grew by 2.2% (its largest growth since May 2017). Public new housing also saw growth, increasing by 8.4% in the three-month on three-month series.

This is the first monthly release to incorporate the revisions made in the GDP quarterly national accounts, UK: January to March 2019 release, published on 28 June 2019.

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