Construction output grew in September, the first increase for five months according to figures from the ONS.
However the data also shows a fall in output over the third quarter as the sector continues to be beset by supply chain issues.
The ONS data shows monthly construction output grew 1.3 per cent in volume terms in September. New work and repair and maintenance both grew month-on-month, increasing by 1.3 and 1.2 per cent respectively.
However, the level of construction output in September remained 1 per cent (£141m) below levels seen in February 2020, prior to the coronavirus pandemic. New work was 3.5 per cent below this level, while repair and maintenance work was 3.9 per cent higher.
In contrast to these more positive monthly figures, quarterly construction output fell 1.5 per cent in Q3 compared to Q2. Both new work and repair and maintenance saw decreases.
However the annual rate of construction output price growth was 5.1 per cent in September, the strongest annual rate since records began in 2014.
Commenting on these figure, McBains managing director Clive Docwra, says: “September’s return to growth will give the construction industry a degree of encouragement that it may be turning the corner, after five successive falls in monthly output.
“The industry will be cautious however, as output is still below pre-pandemic levels. The Quarter 3 figures also published today also show a fall in output compared to Quarter 2, reflecting the volatility in certain work sectors – a decline in infrastructure and private commercial new orders in particular.”
“These quarterly figures also reflect supply chain problems linked to a shortage of haulage drivers, but these [problems[ should be past their peak. However, the cost of essential materials remains high, and skills shortages are still biting, leading to some new work being put on hold.”
Beard finance director Fraser John adds: “The growth recorded in September is an encouraging sign. Following a concerning trend of declining output, this will hopefully mark a turning point for the construction industry.
“Recovering from the pandemic was never going to be plain sailing the whole way. Despite the positive signs in September, looking at the quarter as a whole, Q3 marked the first quarterly fall in output since Q2 2020.
“However, it appears client confidence is gradually returning in the market, as new work increased in September. As more clients are giving the green light to projects, it appears supply chain issues and price rises for raw materials will not be an insurmountable challenge.”
Meanwhile property consultancy and surveyors Naismiths director Gareth Belsham says: “After four straight successive quarters of expansion, the construction industry contracted sharply in Q3.
“The decline earned construction the economy’s wooden spoon. Manufacturing contracted by a more modest 0.3 per cent and the services sector grew by 1.6 per cent during the third quarter.
“Construction’s lacklustre performance confirms that the chronic shortages of both building materials and people are proving to be serious obstacles to growth.”
“With concrete, timber, glass and steel all in short supply, the ONS data reveals that in October, 10 per cent of builders simply could not source the materials they needed. A quarter of contractors managed to get what they needed but were forced to change suppliers. This is far higher than the proportion of businesses in other industries reporting similar supply problems, suggesting that construction has been hit harder than most.
“Nevertheless this latest official data is far from a washout. After falling in August, construction output actually grew in September, allowing some to hope the worst may be past.”
