November 2024 Construction Output Growth

MONTHLY CONSTRUCTION OUTPUT is estimated to have grown by 0.4% in volume terms in November 2024.

The latest figures from the Office for National Statistics (ONS) also added an upwardly revised decrease of 0.3% in October 2024.

November 2024 Construction

November 2024’s increase in monthly output came from rises in both new work (0.3%) and repair and maintenance (0.5%).

At the sector level, five out of the nine sectors grew in November 2024. The main contributors to the monthly increase were private commercial new work and non-housing repair and maintenance, which grew by 3.1% and 1.1%, respectively.

Three Months

Construction output is estimated to have increased by 0.2% in the three months to November 2024. The growth came solely from an increase in new work (0.4%), as repair and maintenance was flat (0.0%) over the period.

INDUSTRY COMMENT

Jump to Pole Position

Gareth Belsham

Gareth Belsham, director of Bloom Building Consultancy, commented:

“After a few bruising months, construction has jumped into pole position as the best performing sector of the economy.

“Output across the industry rose by 0.4% in November, four times faster than the UK economy as a whole.

“The return to growth means construction has dragged itself into expansion territory over the past three months – it’s up by 0.2% over the quarter.

“But for all the surface sheen, the official data is far from a clean bill of health. Fortunes within the construction industry are diverging rapidly.

“Private sector housebuilders built 1.2% less in November than they did in October, and new home construction as a whole is stuck in reverse.

“On the other side of the coin, commercial projects are booming on the back of rising demand for office space as employers seek to get more of their staff back into offices.

“New commercial sector construction surged by 3.1% on the month, and on the front line we’re seeing many commercial property developers pressing the button on previously paused investment plans, as well as an increase in the number of commercial property landlords investing in repair and refurbishment to generate extra value from their existing buildings.

“The surprise fall in inflation, coupled with wider GDP growth, should support fragile business sentiment and sustain this commercial sector momentum in coming months.

“But the outlook for housebuilders is far less rosy. High interest rates are still making it expensive for residential developers to buy land and build homes. Consumer demand is patchy too, making the contrast between residential and commercial construction acute.”

More Supportive Environment

Damien Wynne, Q New Homes

Damien Wynne, of housebuilder Q New Homes, comments: “Growth was driven by new projects and repair work, supported by key economic decisions such as the Bank of England’s interest rate cuts and more stable inflation. If these favourable conditions persist into 2025, they could create a more supportive environment for developers and investors.

“However, high construction costs continue to squeeze profits and delay projects. The Autumn Budget’s higher business taxes may also slow the sector’s growth this year. Persistent supply chain issues and labour shortages remain significant hurdles.

“On a positive note, CPI inflation also eased to 2.5% this week, potentially reducing financial pressures on house builders and boosting economic confidence. Nonetheless, core inflation remains elevated at 3.2%, above the Bank of England’s 2% target.

“Looking ahead to 2025, there is some cautious optimism. The sector is expected to recover, driven by new technology, increased project starts, and supportive government policies. However, challenges such as slow economic growth and high cost of labour will continue to impact short-term progress.

>> Read more about November 2024 construction activity in the news.