Construction output saw a decrease of 0.6% in the three months to November 2023, solely from a decline in new work (3.6% fall) while repair and maintenance increased by 3.8%.
The latest report from the Office for National Statistics has estimated that monthly construction output decreased 0.2% in volume terms in November 2023, following an upwardly revised decrease of 0.4% in October 2023, with the monthly value in level terms in November 2023 at £15,571 million.
The decrease in monthly output came solely from a decline in new work (2.0% fall) as repair and maintenance increased by (2.1%).
Taking a closer look at the sector level, three out of the nine sectors saw a fall in November 2023, with the main contributors to the monthly decrease seen in private new housing and infrastructure new work, which decreased 3.9% and 2.0%, respectively.
The ONS reported that anecdotal evidence suggested effects of adverse weather, including heavy rainfall and strong winds in November 2023 led to delays in planned work, resulting in the fall in output.
Industry reactions
Commenting on the findings, Terry Woodley, MD of development finance at Shawbrook, commented: “Construction output lagged in November, with both house building and commercial construction struggling to build momentum following sustained high interest rates and rising costs.
“Though December’s figures may be similar, 2024 holds a more positive outlook with interest rates expected to either hold or fall, which is encouraging more confidence in the sector. Developers should continue to be resilient and use this as an opportunity to consider where they can make changes to their business strategy to ensure it’s robust against persistent challenges.
“For example, our research revealed that developers are making changes such as looking to build in different locations (47%), changing building materials (40%) and planning to build different types of properties (39%). Similarly, working with a specialist development finance lender can offer a more tailored funding solution, which can help guide developers’ next steps as we enter 2024.”
Meanwhile, the Federation of Master Builders expressed it concern, noting that the latest figures demonstrate a worrying trend emerging in the UK construction industry – that the Repair, Maintenance and Improvement (RMI) sector is propping up declining growth in construction activity.
Brian Berry, chief executive of the FMB said: “November once again marks another month of decline in construction industry output. While it is positive that the RMI sector, which makes up the backbone of the sector, has seen significant growth of 2.1%, this cannot be a substitute for the delivery of new projects. The Private New Housing sector and the Infrastructure New Work sector have both seen sharp declines, which is deeply concerning for the long-term sustainability of the wider industry.”
Brian continued: “The UK is experiencing a housing crisis, and yet the government’s response to date has been limited. Despite positive first steps being taken by the Chancellor, the measures announced by the government so far go nowhere near far enough to tackle the challenges the UK faces in delivering the vast increase in high-quality housing that the country needs. We need to see serious action delivered as an urgent priority, as papering-over cracks can never be a viable solution in the long-term.”
