Construction output is estimated by the ONS to have increased by 0.8% in the third quarter compared with the second quarter; this came solely from an increase in new work (2.0%), as repair and maintenance fell by 0.6%.
However, total construction new orders fell 22.0% (£2.72bn in Q3 compared with Q 2; this quarterly decrease came mainly from private new housing and private commercial new work, which fell 31.3% (£861m) and 20.8% (£786m), respectively.
Commenting on the latest figures Bloom Building Consultancy director Josh Ward-Jones said:
“There’s also a two-speed feel to the industry data, with private sector housebuilding stuck in reverse as high interest rates continue to hold back developers’ willingness to buy land and build homes.
“The picture is even more alarming when you look at the pipeline. The value of new orders placed by private sector housebuilders fell by a third on the quarter, and is down by a painful 34.4% compared to Q3 2023.
He added: “Such a sharp slowdown in developer demand for residential construction underscores the huge task the Chancellor faces in her quest to re-energise housebuilding.
“Labour has promised to ‘get Britain building again’ and get 1.5 million more homes built in England over the next five years. The sector now awaits with interest the planning reforms and release of green belt land the Government says will kickstart housebuilding in areas where people want to live.
Q New Homes co-founder Damien Wynne commented: “As we move into 2025, the construction industry is likely to face heightened competition, particularly in the housing sector. Developers will need to adapt to a recovering market where both demand and supply continue to balance out.
“Energy-efficient homes, which align with growing environmental concerns, will be increasingly sought after, as buyers look for properties that offer long-term savings on energy costs.”
