Sector - Consultancy

ONS: Construction output on the rise in Q3 2018



Construction output is on the road to recovery, according to the latest figures from the Office for National Statistics (ONS).

Having suffered a relatively weak start to 2018, falling 1.6% during the first quarter, construction output has risen steadily – by 0.8% in Q2 and, most recently, 2.1% in Q3. ONS analysts say market growth has been driven by new work orders, which increased 2.8% during Q3, and repair and maintenance contracts, which rose a further 1.0% over the same period. Crucially, the level of work in September amounted to £13,995 million – a record high since monthly records began in January 2010.

According to ONS, construction output rose £872 million during Q3 in comparison to the previous quarter. The biggest contributor was private housing new work orders, which increased £507 million between Q2 and Q3. In addition, notable quarterly growth came from the non-housing repair and maintenance and infrastructure sectors, which rose by £230 million and £191 million respectively.

In stark contrast, private commercial, private housing repair and maintenance, and private industrial new work orders flagged between quarters two and three. These sectors decreased by £162 million, £124 million and £60 million respectively.

While this upturn in construction output will give the industry reason to be cheerful, Clive Docwra – Managing Director of the construction consultancy and design firm, McBains – was quick to urge caution: “The figures are encouraging and show that the industry is building some momentum – with three-month on three-month growth recorded again.

“However, issues such as Brexit and the high cost of imported materials are still hanging over the sector and holding back key investment decisions. Recruitment is also a growing issue, with wages of scarce skilled tradespeople continuing to rise and the future status of EU-workers in the UK still unclear beyond March 2019.”

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