Construction Activity Continues to Grow in September But More Slowly

CONSTRUCTION OUTPUT grew by 2.9% in September 2020 compared to August 2020, according to latest Office for National Statistics figures. The increase was driven by rises in new work (2.7%) and repair and maintenance (3.4%).

Although this is the fifth consecutive month of growth in construction activity, it is the lowest rise in that time.

Compared to pre-pandemic times, the level of construction output in September 2020 was 7.3% below that in February 2020, with only infrastructure and private new housing having returned to above their pre-pandemic levels of output. All other types of work in September 2020 have yet to recover, with public new housing the furthest below its February 2020 level at 29.4%.

Quarterly Record Rise

Quarterly construction output grew by a record 41.7% in Quarter 3 (July to Sept) 2020 compared with Quarter 2 (Apr to June) 2020. The growth was driven by record quarters in both new work (40.8%) and repair and maintenance (43.4%).

The increase in new work in the quarter was across all sectors, with private new housing the largest contributor, which grew by 84.4% in Quarter 3 2020 compared with Quarter 2 2020.

The increase in repair and maintenance (43.4%) in Quarter 3 2020 was because of record growth in all repair and maintenance sectors. Again, the largest contributor was private housing repair and maintenance, which grew by 70.9% in Quarter 3 2020 compared with Quarter 2 2020.

New Orders

New orders grew by a record 89.2% in Quarter 3 2020 compared with Quarter 2’s record fall of 54.0%. This means that new orders have returned to a level comparable with the same period’s quarterly figures in 2019, and in fact have increased slightly by 0.6%.

The record new orders quarterly growth came from 88.7% growth in new housing and 89.4% in all other work. Public new housing was the only sector to decline in this quarter compared to the previous three months, falling by 1.8%.

Overall, the annual rate of construction output growth stands at 0.4% in September 2020.