December construction levels reach highest volumes since March 2021 | Mortgage Strategy

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Construction output across the UK jumped 2% in December, the equivalent of £281m, according to data published last week by the Office for National Statistics (ONS).

The increase came solely from a spike in new work (3.5%), as maintenance and repair construction declined 0.7% over the month.

Output in December 2021 beat levels seen in pre-pandemic February 2020, though new work was 2% below February 2020 output.

In addition to the monthly growth, quarterly construction output grew by 1% over the fourth quarter of last year, with increases across both new work and repairs of 1.1% and 0.8% respectively.

Infrastructure new work and private new housing were the largest contributors to the monthly increase, each growing 8.5% (£212m) and 3.1% (£95m) respectively.

Public new housing construction also increase 7.4%, by £30m.

Year-on-year, total construction output increased 12.7% in 2021 compared to the previous year, making it the largest annual increase since records began in 1997, according the ONS.

It follows a record fall in construction of 14.9% in 2020 during the pandemic.

“After last month’s figures showed a welcome increase in output following the easing of supply chain bottlenecks, today’s figures will be a further tonic to the industry, especially because the impact of Omicron was expected to have disrupted work,” says McBains managing director Clive Docwra.

“Particularly encouraging is that output was above pre-pandemic levels, and although new work remains below that of February 2020, this is likely to represent a seasonal pause in work rather than a reluctance by investors to commit to new projects.”

According to Docwra, it is too early to tell whether the increases point to a long-term recovery, particularly in the wake of soaring commodity prices across Europe.

High costs incurred by product manufacturers currently, from making bricks, steel, concrete and cement, will pass quickly to construction firms, he says.


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