Construction output remains at record lows despite rise: ONS | Mortgage Strategy


Construction output grew by a record 23.5 per cent in June, significantly higher than the monthly growth of 7.6 per cent seen in May, according to the latest ONS statistics.

Despite the positive figures, levels of construction were still low compared to output prior to the coronavirus pandemic; June figures were 24.8 per cent lower than February 2020.

Quarterly, construction output fell by a record 35 per cent in the second quarter of 2020 – from April to June – compared to the first quarter of the year. The ONS says this was driven by record falls of 35.2 per cent in new work and 34.7 per cent in repair and maintenance.

Construction in private new housing was the biggest contributor to the drop in new work figures, down 51.2 per cent in the second quarter, compared to Q1.

New orders decreased by a record 51.1 per cent in the second quarter, compared with the first, due to record falls in both all other work and new housing, which declined by 51.9 per cent and 49.0 per cent respectively.

Naismiths director Gareth Belsham says: “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.

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

“The impact of the pandemic is redrawing the industry map too. Private sector housebuilding, for years construction’s star performer, collapsed by more than half in Q2 – more than any other construction subsector.

“With building sites now fully open across the UK, albeit operating under strict social distancing rules, the fightback starts here.”

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