Construction output is estimated to have increased by 0.8% in Q3 2024 compared with Q2, coming solely from an increase in new work (2.0%) as repair and maintenance falls by 0.6%.
The Office for National Statistics (ONS) further specified that monthly construction output is estimated to have grown by 0.1% in volume terms in September 2024, solely from a rise in repair and maintenance (0.4%) as new work fell by 0.2%.
At the sector level, four out of the nine sectors grew in September 2024; the main contributor to the monthly increase was private housing repair and maintenance, which grew by 1.3%.
Total construction new orders fell 22% (£2,722 million) in Q3 2024 compared with Q2. This quarterly decrease came mainly from private new housing and private commercial new work, which fell 31.3% (£861 million) and 20.8% (£786 million), respectively.
The annual rate of construction output price growth was 2.0% in the 12 months to September 2024.
Industry reaction
FMB
Federation of Master Builders (FMB) noted that the 0.6% fall in repair maintenance and improvement work reflected growing consumer unease.
Brian Berry, Chief Executive of the FMB, said: “The positive growth in the construction sector of 0.8% in the third quarter of 2024 is a welcome signal that the construction industry is starting to show signs of recovery, after what has been a difficult few years.
“The 2% growth in new work on Q2, is indicative of growing market confidence. However, the 0.6% fall in repair and maintenance shows the building industry is not out of the woods yet, and with the economy barely growing this could represent consumers being careful with their spending. New orders on housing are particularly worrying, given their significant fall over the quarter, this is despite the Government’s efforts to build 1.5 million homes.
“The new Government have made early announcements that they are prioritising housebuilding, with new targets set, and significant planning reforms announced. The Q3 data released today suggests the construction industry has reacted positively, but the Government must now keep up the momentum. A long-term plan is needed to tackle the ongoing skills crisis, as well as a concerted effort to diversify the housing market by supporting SME builders, if the Government is serious about meeting its ambitious goals.”
Dr David Crosthwaite, chief economist at BCIS, said:“While whole economy GDP growth was disappointing, construction output growth in Q3 outperformed other sectors of the economy and grew by 0.8% on the previous quarter.
“Growth in new work output, particularly infrastructure, was the main driver as repair and maintenance output declined. Q3 is the summer quarter, and historically, is accompanied by increased construction output as the weather is better.
“On the face of it, the output data looks like good news following three quarters of decline. However, on an annual basis, construction output is still lower than the same quarter in 2023, so some way to go before we see material growth in our sector.
“The new orders data is a reality check to the relatively positive output data, with a significant decline (-22%) in Q3 orders when compared to the previous quarter. Private new housing led the fall, with orders declining by almost a third on the previous quarter.
“As a result, the future pipeline is looking slightly less robust, and the government’s new home building target looks even more challenging.”
