august figures

Construction output grew 2.1% in 3rd quarter

Construction output is continuing to recover following a relatively weak start to the year, increasing by 1.7% in September 2018 and by 2.1% for the third quarter.

The 2.1% growth in GB construction output in Quarter 3 (July to September) 2018 followed a fall of 1.6% in the first quarter and an increase of 0.8% in Quarter 2 (April to June) 2018.

Growth in the third quarter of 2018 was driven by all new work which increased by 2.8%, and repair & maintenance which increased by 1.0%, according to Office National Statistics data for Great Britain.

Between August and September 2018, construction output increased by 1.7%, driven by a 2.8% increase in all new work and partly offset by a fall of 0.3% in repair & maintenance.

The level of the all work series for September 2018 reached £13,995 million – a record high since the monthly records began in January 2010.

Construction output increased by £872m in Q3 2018 compared with Q2 2018. The most notable contribution to growth came from private housing new work, which increased by £507m between Q2 and Q3.

Non-housing repair & maintenance and infrastructure also grew strongly, by £230m and £191m respectively.

In contrast, downward pressure on construction output in Q 3 2018 came from private commercial new work, private housing repair & maintenance and private industrial new work, which had falls in the three-month on three-month series. These decreased on Q2 by £162m, £124m and £60m respectively.

construction output 2

Blane Perrotton, managing director of the national property consultancy and surveyors Naismiths, commented: “The construction industry is enjoying an Indian Summer. True, the surge in output in the third quarter is flattered by comparison with the grim decline of the first quarter and the plodding indifference of the second. But this is real, and welcome, progress.

“House-building retains its crown as both poster child and ‘get out of jail’ card for the industry as a whole. House-builders delivered a half billion boost to the industry in the third quarter, but elsewhere the growth was patchy at best. Infrastructure work remains in positive territory but output is down, with contractors focusing on finishing existing projects rather than starting new ones.

“Among developers there is a widening confidence gap between the overheated southeast and other areas where demand is stronger and margins better. Despite a marked improvement in the Brexit mood music this week, months of deadlocked negotiations have choked investor appetite. Unless and until the political limbo is ended, the industry will continue its holding pattern of two steps forward and one step back.”

Source: UK Construction Week

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