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Construction output growth at highest since January 2019

According to the most recent construction output report from the Office for National Statistics (ONS), construction output in November grew by the highest monthly proportion since January 2019 while the three months building up to November experienced similar growth.

Going into further detail, the output report outlines how the monthly figure, displaying an increase of 1.9 per cent, was perpetuated by inclines within subsectors such as new work, which increased by a proportion of 2.4 per cent, as well as repair and maintenance, which increased by a figure of 0.9 per cent.

This monthly growth in construction output, compared with that of the previous month, was the greatest increase since January 2019 which experienced an output growth of 2.4 per cent when it was compared with output figures for December 2018, making it the second most improved month of 2019 so far.

Regarding the three months that built up to November 2019, construction output likewise grew but to a lesser proportion than the month on its own, with the figure itself displaying an incline of 1.1 per cent that was bolstered by a 1.6 per cent increase in new work and a 0.2 per cent increase in repair and maintenance.

Furthermore, the increase in new work over the course of the three month period was driven by said new work within the subsectors of private housing (0.4 per cent), infrastructure (three per cent), and private commercial work (1.8 per cent).

Meanwhile, the lesser increase in repair and maintenance over the course of the three month period was driven by repair and maintenance within the non-housing subsector (1.2 per cent) and public housing subsector (2.5 per cent) with an offset decrease within the private housing subsector (1.9 per cent).

In response to the figures, the Chief Executive of the Federation of Master Builders (FMB), Brian Berry, stated: “While 2019 was a year marked by political and economic uncertainty, there does seem to be some small signs of hope for the construction industry, with the largest monthly growth in the industry seen in November since the start of the year.

“It is too soon to tell whether this will be a longer term trend, as some sectors such as private house building and repair and maintenance continue to see sluggish growth.

“The upcoming Budget provides the perfect opportunity for the Government to help ensure this positive trend at the end of 2019 continues into the new decade.

“In order to help boost the industry, the Chancellor should prioritise cutting VAT on home improvement works, so that tax is not a barrier to homeowners upgrading the energy efficiency of their properties.

“The Government should also use the Budget as an opportunity invest in construction skills to help build the homes and infrastructure we need and invest in planning departments to ensure the planning system does not act as a blockade to the Government’s ambitious housing targets.”

The Director of Naismiths, a national property consultancy and surveyor company, Gareth Belsham then added: “Fragile confidence, weak demand, and contractors running out of orders, it is all there.

“Rising output in infrastructure and commercial construction was tempered by a contraction in private sector house-building.

“Yet the month-on-month increase, which jumped to 1.9 per cent, the highest level since January 2019, gives a hint of the rebound that has followed the election.

“Such a clear election result and an end (for now) to Brexit uncertainty have helped the industry to reset. The return of clarity, if not yet unbridled confidence, is prompting many developers who spent 2019 sitting on their hands to pull the trigger in 2020.

“The industry is far from back to health, but in the space of less than a month, its newfound sense of purpose is starting to make these November figures seem very distant.

“The questions now will be how long the Boris bounce can sustain, and whether the capacity-cutting of last year will hamper contractors’ ability to cope with a rise in demand.”

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