Private housing drives construction output recovery

9 November 2018 | By Neil Gerrard

Output in the construction sector continued its recovery in the third quarter of this year (July to September) after a weak start to the year, driven by growth in private housing new work.

Output increased by 2.1% in Q3 2018, as compared to the previous quarter. That followed a 0.8% rise in Q2 and a 1.6% fall in Q1, according to figures from the Office for National Statistics (ONS).

In comparison with September 2017, construction output increased by 3%. This was thanks to a 3.4% increase in all new work, along with a 2.4% growth in repair and maintenance. The total volume of all work during the period was an all-time high (since records began in 2010) of £13,995m.

While private housing new work and infrastructure grew by 9.9% and 10.7% respectively in September 2018 as compared to September 2017, the 'public other' (inclusing schools and hospitals) and private commercial new work sectors continued to decline, falling by 10.2% and 3.7% respectively. It was the 18th consecutive fall in the month-on-year series for public other new work and the 10th consecutive fall in the series for private commercial new work.

Commenting on Twitter, Construction Products Association economics director Noble Francis said: “The ONS construction output illustrates continuing trends: private housing growth (outside London) offsetting falls in commercial, health and education. Industrial warehouses are growing rapidly from a low base (in value). Infrastructure and repair and maintenance are also providing growth and this growth has offset the £1.2bn fall in public non-housing so far this year (January to September) compared with a year earlier.”

Clive Docwra, managing director of consulting and design agency McBains, added: “Today’s figures are encouraging and show that the industry is building some momentum – with three-month on three-month growth recorded again"

“However, issues such as Brexit and the high cost of imported materials are still hanging over the sector and holding back key investment decisions.

“Recruitment is also a growing issue, with wages of scarce skilled tradespeople continuing to rise and the future status of EU-workers in the UK still unclear beyond March 2019.”

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