Monthly Construction Output Highest Since September 2019

MONTHLY CONSTRUCTION output increased by 1.1% in volume in January 2022 to £14,676 million and is now at its highest level since September 2019 when it was £14,726 million.

The growth follows an increase of 2.0% in December 2021 and is the third consecutive monthly rise greater than 1.0%.

Monthly Construction Output

The increase in monthly construction output in January 2022 came solely from an increase in repair and maintenance (4.6%) while new work saw a slight decrease of 0.8% on the month.

Within repair and maintenance, the main contributors to growth in January 2022 were private housing and non-housing, which grew by 5.0% and 5.5%, respectively.

Overall, the level of construction output in January 2022 was 1.4% (£197 million) above the February 2020 pre-pandemic level. Repair and maintenance work was 9.3% (£464 million) above the February 2020 level, while new work was 2.8% (£267 million) below it.

The post-pandemic recovery is mixed at a sector level, with infrastructure 37.9% (£709 million) above and private commercial 27.8% (£693 million) below their respective February 2020 levels.

Alongside the monthly increase, construction output rose 3.0% in the three months to January 2022. This is the strongest growth in the three-month on three-month figures since last June (3.4%), with increases seen in both new work and repair and maintenance (4.0% and 1.4%, respectively).

Materials Availability

The ONS says the output growth in the three months to January 2022 is partly because of the easing in sourcing construction products. Supply chain issues experienced in the latter half of 2021 have continued to improve in January 2022.

In October 2021, 11.0% of construction businesses were unable to source materials, goods or services needed from within the UK. This has since fallen to 3.0% in January 2022.

INDUSTRY RESPONSE

Construction’s recovery threatened by Ukraine crisis, says FMB

The recovery in construction output to its highest level since September 2019 risks being undermined by the invasion of Ukraine and the impact this is having on the supply of materials and rising costs, says the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the Federation of Master Builders

Brian Berry, Chief Executive of the FMB, said: “Construction output is now at its highest level since September 2019, which is very positive news following an extremely difficult two years for builders. Interestingly, repair, maintenance and improvement projects were responsible for much of the increased output in January. The impact of the Russian invasion of Ukraine is likely to exacerbate the current challenges around the cost and procurement of building materials, with oil, steel, aluminium, timber, and copper set to be some of the worst affected materials.”

“At a time when costs are surging, the situation puts builders in the unenviable position of having to raise costs for a customer base that is tightening its belts. To counter this, the FMB is advocating that the Government bring forward policy interventions at the upcoming Spring Statement that can ease the effects of this increase. In particular, there is a growing need for a National Retrofit Strategy and a cut in VAT on all energy efficient home improvements. These policies would provide an economic boost for local builders, reduce consumers’ vulnerability to energy shocks and further the UK on its journey to net zero.”

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