Construction output slips 0.5% during wet July

Aaron Morby 9 months ago
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Construction output has started to yo-yo between modest growth and contraction.

Latest monthly construction output for July fell 0.5% in volume terms, following the 1.6% increase in June, after two months of slides before that

The decrease in monthly output came solely from a 1.3% decrease in repair and maintenance, with new work increasing 0.1% on the month.

At the sector level, five out of the nine sectors saw a fall in July with the main contributors to the monthly decrease being private housing repair and maintenance, and private housing new work, which decreased 3.9% and 2.2%, respectively.

On the upside, private commercial bounced up 4.2% and infrastructure edged up 0.8%.

Anecdotal evidence suggests heavy rainfall in July led to delays in planned work as the housing market also continued to slowdown amid high interest rates.

Alongside the monthly decrease, construction output was flat in the three months to July as a 0.3% increase in new work was offset by a 0.4% decrease in repair and maintenance.

Fraser Johns, finance director at Beard Construction said: “With the UK seeing the wettest July for more than a decade, it should come as no surprise to see overall construction output take a dip.

“The continued slowdown in the housing sector is certainly helping to skew the entire industry picture, as both private housing repair and maintenance, and new work continue to face sustained pressure.

“Although only marginally, it is a positive to see new work increasing – not just in the month, but in the three months to July.

“It’s a reminder that while some sectors are facing real challenges, others are opening up with clients continuing to find their confidence. This has been reflected on the ground at Beard and in our future pipeline opportunities, as demand remains strong – particularly within frameworks.

“While we have seen signs of improvement in recent months, especially with inflation easing and the stabilisation of supply and costs, the industry has a whole remains very volatile with the picture changing from month to month.”

Clive Docwra, managing director of property and construction consultancy McBains, said: “A significant factor is high mortgage rates denting demand for new homes, reflected by the continued sluggish performance in volume housebuilding.  

“My guess is that we could see more private house builders forging closer partnerships with local authorities and housing associations to pursue mixed tenure models such as social housing and shared ownership, which are less impacted by volatility in the wider property market.”

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