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New work drives improved construction output

14 January 2020 | By Neil Gerrard

Construction output improved at the end of 2019, thanks largely to an increase in new work, the latest government figures have revealed.

Output rose by 1.1% in the three months to November 2019 compared with the previous three months, the Office for National Statistics (ONS) said. That was driven mostly by a 1.6% increase in new work, with a smaller 0.2% rise in repair and maintenance.

There was growth in all sectors apart from private housing, which fell by 0.4%. The largest contribution came from infrastructure and private commercial, which grew by 3% and 1.8% respectively.

Source: ONS

Meanwhile, construction output increased by 1.9% in November month on month as new work ticked up by 2.4% and repair and maintenance grew by 0.9%. The 1.9% rise was the largest monthly increase since January 2019, when output increased by 2.4%.

In addition to the ONS figures, the Department for Business, Energy and Industrial Strategy (BEIS) and Glenigan published their construction figures for November. General consensus suggests that the construction industry’s output has slowed over the past year compared to November 2018. 

BEIS reported a 9.3% decrease in brick deliveries and 8.9% decrease in concrete block deliveries in November 2019 compared to the previous year, seasonally adjusted. The material price index of “All Work” decreased by 0.6% in November 2019 compared to the same month the previous year as well. 

On 7 January, Glenigan published their latest index of construction activity in the UK on the three months to December 2019. Compared to 2018, new project starts were 19% lower, residential starts were 27% down and non-residential projects were 12% lower. The snap election temporarily disrupted the flow and the value of work starting on site during the final quarter of 2019 which fell 15% against the previous quarter on a seasonally adjusted basis. 

Commenting on the figures, Caroline Gumble, chief Executive at the CIOB, said: “Comparing these latest figures to those in 2019, it is apparent that investment into new builds and refurbishment has slowed. We believe this is due to low business confidence leading to a reluctance to expand, reduction in infrastructure investment and less long-term planning commitments.  This is yet more reason for government to heed calls to focus on a pipeline of well-planned projects and support for sector jobs across the UK. These should be among the priorities for the new government for this important sector.”

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