ONS Construction Output: July 2023
This Construction Output provides an overview of the latest statistics released by the Office for National Statistics (ONS). The data used in this report is based on short-term measures of output by the construction industry in May 2023 and contracts awarded for new construction work in Great Britain.
Monthly Construction Output
The monthly construction output decreased by 0.2% in volume terms. This marks the third consecutive decline in the month-on-month series. The monthly value, in level terms, was £15,360 million.
Breakdown of Monthly Output
The decrease in monthly output was solely due to a 0.4% fall in new work, while repair and maintenance remained unchanged at 0.0% on the month.
Sector Level Analysis
Last month, four out of the nine sectors experienced a decline. The main contributors to this monthly decrease were non-housing repair and maintenance, which decreased by 2.5%, and private housing new work, which decreased by 1.7%.
Economic Concerns
Anecdotal evidence suggests a slowdown in private housing due to customers’ economic concerns. However, some businesses in other sectors reported a reduction in inflationary pressures.
Impact of Additional Bank Holiday
On May 8th, an extra bank holiday was observed for the coronation of King Charles III. Although adjustments were made for regular calendar effects, no specific adjustment was made for this additional event. The timing of the bank holiday indirectly impacts the number of trading days, which could potentially affect monthly construction estimates.
Three-Month Performance
In addition to the monthly decrease, construction output experienced a 0.2% increase in the three months leading up to May 2023. This marks the ninth consecutive period of growth in the three-month-on-three-month series. However, it is worth noting that this is the slowest growth since the decline of 0.1% in the three months leading up to August 2022.
Breakdown of Three-Month Performance
The three-month-on-three-month increase was driven solely by a 2.5% rise in repair and maintenance, while new work experienced a 1.3% decrease. Although there was an overall increase, total repair and maintenance has weakened compared to its strength earlier in the year. The largest positive contributor to the increase was private housing repair and maintenance, which grew by 3.9%. Non-housing repair and maintenance also contributed to the three-month-on-three-month increase, with a growth of 1.6%, despite a decrease in the month.
In summary, May 2023 saw a 0.2% decrease in monthly construction output, marking the third consecutive decline. New work decreased while repair and maintenance remained unchanged. Four sectors experienced a fall, mainly in non-housing repair and maintenance and private housing new work. Private housing showed a slowdown while other sectors reported easing inflation. The additional bank holiday for King Charles III’s coronation indirectly affected trading days. Over the three-month period, construction output increased by 0.2%, the weakest growth since August 2022. Repair and maintenance drove the growth, but total repair and maintenance weakened compared to earlier in the year.
