New Work and RMI Fall as Construction Output Decreases in July 2024

MONTHLY construction output is estimated to have decreased 0.4% overall in volume terms in July 2024.

The fall in monthly output, which follows an increase of 0.5% in June 2024, came from falls in both new work (0.2%) and repair and maintenance (0.7%) during July.

At the sector level, monthly output fell in 5 out of the 9 sectors in July 2024. The main contributors to the monthly decrease came from private commercial new work and private housing repair and maintenance, which fell by 2.4% and 1.7%, respectively.

Three Months Construction Output

Construction output is estimated to have grown by 1.2% in the 3 months to July 2024. This came from increases in both new work (1.6%), and repair and maintenance (0.8%).

The increase in construction output in the three months to July 2024 came from increases in May 2024 (1.7%) and June 2024 (0.5%).

COMMENT

Terry Woodley, MD of Development Finance at Shawbrook

Terry Woodley, MD of Development Finance at Shawbrook, commented: “Despite the warmer weather, construction remained sluggish, with rising costs for materials and labour, compounded by the naturally slower summer holiday period.

“However, there are signs of recovery in certain areas, particularly in new work and infrastructure, which helped mitigate a more significant drop in overall activity.

“As we approach the Autumn Budget, the Government’s recent plans to increase housebuilding targets and relax planning restrictions have been welcomed, contributing to a more optimistic long-term outlook for the sector.”

Brian Berry, FMB Chief Executive

Brian Berry, Chief Executive of the FMB, added: “It disappointing to see activity in the construction industry contracting, following what had been a promising start to the summer. The 0.4% overall decline, coming from falls in both new work and repair and maintenance, is a worrying sign that challenging times remain ahead for the construction industry, especially with today’s announcement showing that the UK economy is flatlining. Improving market conditions play a vital role in boosting confidence, and it is crucial the Government prioritises economic stability.

“Following the recent General Election it has been encouraging that the new Government is making house building a key priority. The early announcements setting ambitious housing targets and proposing significant planning reforms are promising. However, the UK is currently experiencing a serious skills crisis which is affecting all sectors. Delivering a long-term skills plan to significantly boost the numbers of construction workers will be key in growing capacity, delivering stability, and making these goals a reality.”

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