Construction output gain raises V-shape recovery hopes

Aaron Morby 2 years ago
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Construction output grew by 23.5% in June putting the industry on track for a much-needed V-shape recovery after the Covid-19 plunge in workload.

June output gains were substantially higher than the previous record monthly growth of 7.6% in May and left construction as the fastest recovering industry.

Despite this strong monthly growth, construction output in June 2020 remains comparatively low at 24.8% below the February 2020 level, which was before the full impact of the coronavirus pandemic.

The 22% (£1.22bn) growth in new work in June was driven by increases in all new work sectors, with the largest contribution coming from a 42% recovery (£545m) in private new housing which along with commercial took the biggest tumble.

Infrastructure is the only sector to have nearly recovered to its pre-pandemic level, at 3.7% (£69m) below the February 2020 level.

According to Government figures construction had the largest proportion of workforce returning from furlough leave, with 20.5%. This was higher than any other industry and well above the 8.1% average for all industries.

Gareth Belsham, director of the national property consultancy and surveyors Naismiths, said: “June’s record-smashing, gravity-defying spike in output shouldn’t distract from what has been a frankly brutal three months for the construction industry.

“With total output down by more than a third over the quarter and new orders shrinking to less than half the level registered during the ‘Boris bounce’ mini-boom seen at the start of the year, this is nothing if not white knuckle stuff.

“Nevertheless as the industry licks its wounds and resets, there are a few rays of light.

“Output has increased for two months in a row and momentum is increasing. June’s 23.5% surge was triple the 7.6% growth seen in May.

“The recovery is still young and fragile, but so far it is taking the hoped-for V-shape.”

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