Construction Output Fell for First Time This Year in June 2022

MONTHLY CONSTRUCTION output fell by 1.4% in June 2022 – the first fall this year and since October 2021, following seven consecutive months of growth.

However, this is in the context of an upwardly revised 1.8% increase in May 2022’s construction figures, according to the latest release of figures from the Office for National Statistics (ONS).

Both months were affected by the timing of the Jubilee bank holiday, the ONS says.

The decrease in monthly construction output in June 2022 came from falls in new work (2.0%) and repair and maintenance (0.2%).

At the sector level, the main contributors to the decrease in June 2022 were private new housing and private commercial new work, which decreased 6.1% and 4.5%, respectively.

The level of construction output in June 2022 was 2.9% (£414 million) above the February 2020 pre-coronavirus pandemic level. Repair and maintenance work remains the stellar performer and was 12.6% (£626 million) above the February 2020 level. New work, by contrast, was 2.2% (£212 million) below its February 2020 level.

Despite the monthly decrease, construction output increased by 2.3% overall in Quarter 2 (Apr to June) 2022, with increases seen in both new work and repair and maintenance (3.3% and 0.8%, respectively).

Total New Orders

Total construction new orders decreased 10.4% (£1,355 million) in Quarter 2 2022 compared with Quarter 1 (Jan to Mar) 2022; this is the largest quarterly fall in construction new orders since Quarter 4 (Oct to Dec) 2020 (11.7%).

The annual rate of construction output price growth was 9.6% in the 12 months to June 2022, which is the strongest annual rate of price growth since records began in 2014.

INDUSTRY COMMENT

Help Boost Building Work

Brian Berry, Chief Executive of the Federation of Master Builders

Brian Berry Chief Executive of the Federation of Master Builders (FMB) said: “Costs are up across the board for both builders and consumers alike which is affecting business confidence. With 98% of FMB members experiencing material cost increases builders are inevitably having to pass on these costs to consumers. The result is that householders are starting to hold back with many households increasingly concerned about rising energy prices and the threat of a recession later in the year.”

“With the Government at a standstill, we won’t see any ambitious announcements to help support the sector until September with the new Prime Minister will be announced. In the meantime, the Conservative leadership candidates need to be explaining what they intend to do help the construction sector boost economic growth. Cutting the rate of VAT from 20% to 5% or below on all repair, maintenance, and improvement work would be a welcome start to help boost building work all across the country and help people insulate their homes ahead of further rising energy bills.”  

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