January 2024 Construction Activity on the Up After Quarterly Falls

CONSTRUCTION OUTPUT is estimated to have decreased 0.9% in the three months to January 2024, according to the latest Office for National Statistics bulletin.

The quarterly decrease came solely from a reduction in new work (4.5% fall), as repair and maintenance increased by 4.0%.

The decrease over the three months to January consisted of reductions in infrastructure new work and private housing new work, which fell 9.3% and 5.2%, respectively.

The main positive contributions during the period came from non-housing repair and maintenance, and private housing repair and maintenance, which increased 3.2% and 3.3%, respectively.

Monthly Construction

Monthly construction output is estimated to have increased 1.1% in volume terms in January 2024. This follows three consecutive monthly falls, with the monthly value of construction activity in January 2024 at £15,422 million.

The increase in monthly output came from increases in both new work (1.1%) and repair and maintenance (1.2%).

At the sector level, six out of the nine sectors saw a rise in January 2024. The main contributors to the monthly increase were private new housing, and non-housing repair and maintenance, which increased 2.6% and 1.9%, respectively.

INDUSTRY COMMENT

Election Season Interest?

Terry Woodley, MD of Development Finance at Shawbrook

Terry Woodley, MD of Development Finance at Shawbrook, commented: “The latest ONS figures showing a decrease in construction activity in the three months to January are balanced by a welcome uptick in construction activity MoM. While falling inflation offers some relief, it may not have been enough to fully offset the headwinds the industry faces. This could delay the potential boost to housebuilding anticipated from softening mortgage rates.

“Similar to other sectors, commercial construction continues to grapple with supply chain disruptions and weather-related setbacks. Additionally, the lack of specific construction measures in the Spring Budget has further dampened confidence, which could hinder future activity.

“As we approach election season, it will be interesting to see if policymakers prioritise the construction sector and address issues like supply chains and skills shortages. Focusing on areas like brownfield development and sustainable building practices could also be key to a more resilient industry.”

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