Construction dips for second successive month in May: ONS | Mortgage Strategy

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Construction fell by 0.8% in May, totalling £14bn, providing the second successive monthly drop for building work in the UK, according to the Office for National Statistics.

The fall follows a 2% slide in April.

In May, the ONS says falls in new work and repair and maintenance contributed to the monthly decline, adding that “anecdotal evidence from businesses” suggested that “adverse weather conditions” was a contributing factor. 

New work fell by 0.4% while repair and maintenance dropped by 1.5% in May, although the official data body says output in the month was 0.3%, or £43m, above pre-pandemic levels in February 2020. 

However, over the last three months to May construction output grew by 6.3% compared with the previous three-month period, with increases in new work, which grew by 6.6%, and repair and maintenance, which grew by 5.8%.

Over the three months to May, the largest growth areas were in private housing new work and infrastructure, which grew by 7.4% and 9.7% respectively.

Naismiths director Gareth Belsham says: “Torrential rain may have dampened the official output figures for May, but there’s no doubting the heat still in the construction sector.

With both demand and sentiment still very strong, few are worrying about the second successive monthly drop in output. April and May’s figures are no disaster, but they do look anaemic compared to the extremely rapid growth posted at the start of the year.

On a quarterly basis the direction of travel is firmly upwards – up 6.3% compared to the previous three months – and total output is still above its pre-pandemic level.

Within the industry, the star performers are infrastructure – now up a fifth on its pre-pandemic level – and private sector housebuilding, both of which continued to expand in May despite days lost to tropical downpours.”

McBains managing director Clive Docwra adds: “A continued shortage of materials – in particular cement, electrical components, timber and steel – is in turn fuelling price rises for construction firms and increasing the risk of wider inflationary pressures.

With commercial construction work expected to continue to pick up as offices return over the next few months, this materials shortage could also mean a bottleneck in the supply chain that means more projects may be put on hold, putting any revival at risk.”

Beard finance director Fraser Johns says: “We are still at pre-pandemic levels and factors such as adverse weather in May, will have impacted output due to time lost on-site. In these last three months we have seen huge growth of almost 10% in infrastructure, which has a key role to play in terms of moving beyond the pandemic.”

Collaboration with suppliers and customers, and a proactive approach to procurement across the whole industry is going to be vital this summer, especially with concerns over labour shortages as foreign workers depart for the season. 

Without that, the blip we saw in May threatens to become a much bigger problem later on in the year.”


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