Business investment in the construction industry rose by more than a third annually in the third quarter of 2021 as Covid disruption and supply chain bottlenecks continued to ease, according to the latest ONS data.
Investment in the sector grew by 36% year-on-year to £2.8bn, up from £2bn in Q3 2020, analysis by business tax relief specialists Catax shows.
It also represents a 15.7% improvement on the £2.4bn recorded in the second quarter of last year.
The industry is back on par with pre-pandemic norms, having recorded an almost identical £2.8bn of business investment in Q3 2019. However, there is still some catching up to do in order to hit the £3.5bn and £3.2bn recorded in Q4 2019 and Q1 2020 respectively, just before the pandemic erupted.
The sector performed more strongly than the UK’s overall performance in Q3. UK business posted an estimated 2.5% fall in business investment on a quarterly basis, though there was a 2.6% increase on an annual basis.
UK GDP increased by 1.1% in Q3 — leaving it just 1.5% below where it was pre-pandemic (Q4 2019).
The ONS business investment statistics are an indication of net capital expenditure by UK businesses, which includes spending on items such as plant and machinery, transport equipment, software and buildings.
Mark Tighe, CEO of business tax relief consultancy Catax, comments:
“The construction industry is back on par with its pre-pandemic levels of investment, despite some of the supply chain problems which continue to afflict a number of industries.
This progress, with investment performing more strongly than the UK overall, bodes well for 2022.”