Confident Construction Performance in March 2021 With 5.8% Growth

MONTHLY CONSTRUCTION OUTPUT grew by 5.8% in March 2021, the latest Office for National Statistics (ONS) figures show.

The £786 million output came because of monthly growth in every sector except private industrial new work.

Construction March 2021

New work grew by 6.7% (£563 million) in March 2021 compared with February 2021. Private new housing was the largest driver of growth increasing by 9.4% (£272 million).

Repair and maintenance work grew by 4.4% (£222 million) in March 2021 because of increases in all repair and maintenance sectors – the largest contributor was a 7.7% (£144 million) growth in private housing.

Anecdotal evidence received from survey returns for March 2021 suggested increased new work, delayed projects returning to sites, a general increase in demand and confidence across the industry, and unusually warm and dry weather  were contributing factors to the large monthly increase in construction output.

Quarterly Figures

In the quarterly period January to March 2021, construction output grew by 2.6% compared with the last quarter of 2020. This was also driven by growth in both new work (2.8%) and repair and maintenance (2.2%).

New orders increased by 12.2% (£1,227 million) in Quarter 1 2021 compared with Quarter 4 2020. This follows a fall of 7.8% (£848 million) in Quarter 4 2020 but was 13.3% lower than Quarter 1 2020.

The annual rate of construction output price growth was 1.8% in March 2021.

INDUSTRY COMMENT

Clive Docwra, Managing Director of property and construction consultancy McBains, said:

Clive Docwra MD of McBains

“This is further proof of the construction sector’s continuing resurgence, with order books steadily being filled as confidence returns and the industry recovers from the downturn over the previous year.  March represents the largest monthly growth since July 2020 when output grew by 17.8%.  Private new housing has been a key driver, and a landmark has been reached with output now above pre-pandemic levels.

“One slight reservation is that while new contracts continue to come in, construction firms are being squeezed by soaring prices of imported materials, notably concrete, steel and timber.  With margins already tight, the rising cost of raw materials threaten to negate any profit gains, so many construction firms remain on a knife-edge.

“These increasing costs also serve as a warning sign of global inflationary pressures, which could derail any sustained longer term growth.”

Construction Fuelling Recovery

Brian Berry, Chief Executive of the Federation of Master Builders (FMB)

Brian Berry, Chief Executive of the FMB said: “Growth in construction output, especially in the repair, maintenance and improvement sector at 4.4%, is good news for small builders and should indicate to the Government that, with the correct support, builders can help drive the UK’s wider economic recovery.

“To maintain this momentum, the Government needs to build on this success and support Britain’s builders in building back better with a commitment to a long-term retrofit strategy to make our existing homes greener and more energy efficient.”

“The Government should also use its Skills Bill to ensure the right training is available to fill persistent shortages in the traditional trades, such as bricklaying and plastering, as well as new skills to address net zero. And without compromising quality, the Planning Bill offers the valuable opportunity to reverse the decline of small house builders if we are to deliver the new homes the country needs.”

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