Construction output drops for third consecutive month

According to the latest Office for National Statistics figures, the construction sector’s monthly output fell by 1.3% in June 2021. This is the third consecutive month that output has fallen, which the ONS attributed to a decline in repair and maintenance (4.2%) offset by a small increase in new work (0.5%).

This monthly decline means output figures have returned to below the pre-coronavirus (Covid-19) pandemic level in February 2020 at 0.3% (£39m) below; new work was 2.1% (£188m) below this level, while repair and maintenance was 3.1% (£149m) above.

Despite the monthly fall, quarterly construction output grew by 3.3% in Quarter 2 (Apr to June) 2021 compared with Quarter 1 (Jan to Mar) 2021; both new work (3.9%) and repair and maintenance (2.3%) saw increases.

Commenting on the latest ONS figures, Fraser Johns, finance director at Beard Construction said: “Output dropping for the third consecutive month to below pre-pandemic levels should start to ring some alarm bells.

“As an industry we’ve been saying for months now that the pandemic bounce-back could potentially be scuppered by a combination of the serious materials shortage, rising prices, labour shortages and now not enough HGVs on the roads to supply building sites.

“It’s not the kind of prediction anybody wants to be right about, but today’s stats demonstrate that these issues are really beginning to bite.

He added that better news regarding the quarterly output relative to Q2, driven in part by new orders, was “still some way below the growth in the economy overall at 4.8%.”  Johns commented: “And of course, that first quarter was spent under lockdown.

He concluded: “Right now, we have to work together with suppliers, surveyors, customers and consultants to be proactive about the issues we face and take a multi-step approach to things like procurement to manage our way out of this current decline.”