UK sees ‘record’ construction monthly output volume growth but caution remains over future outlook

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CONSTRUCTION output in the UK increased by 1.7% in March 2022, according to the latest ONS figures.

This is the fifth consecutive monthly growth and a record high in monthly level terms – £14,994 million – since records began in January 2010. The level of construction output in March 2022 was 3.7% (£539 million) above the February 2020 pre-pandemic level.

The increase was driven by increases in repair and maintenance (3%) and new work (1%). At the sector level, private housing repair and maintenance (5.8%) and private commercial new work (4%) were the main contributors.

The latest stats mean that construction output rose 3.8% in Q1 2022.

Beard Construction reacted to the figures with both optimism and caution. Finance director Fraser Johns said, “This record-breaking monthly output volume growth and a return to pre-pandemic output levels is a cause for optimism and a measure of the sector’s resilience. However, there are some underlying factors which should also sound a note of caution.

“The monthly growth figures are potentially skewed by repair and maintenance work done after the two winter storms. Meanwhile, all-important new work in March sits at 1.6% below February 2020 levels. And total construction new orders decreased by 2.6% in quarter 1 compared to quarter 4 last year.

“Perhaps most concerning is the continuing rise in the price of raw materials such as steel, concrete, timber and glass. This has pushed price growth in the construction industry to its highest level since records began and remains a challenge to competitive tendering.”

Allan Callaghan, MD of Cruden Building, part of the Cruden Group, explained that the residential sector of construction is entering into a ‘more subdued recovery phase’ as it grapples with Brexit, supply chain issues and inflation.

“Additionally, there is a cost associated with developing new greener materials and processes to build homes more sustainably,” he added. “Scotland is leading the way to achieve net zero targets and combat rising fuel poverty, and it’s important that these challenges don’t curtail the efforts to increase the sustainability of homes. The bar is moving to a new level of innovation and if we don’t move accordingly, there will be a far higher price to pay.”