In the first quarter of 2024, construction output in Great Britain decreased by 0.9%, highlighting ongoing challenges for the industry.
- This setback was attributed to a 1.8% decline in new construction work, despite a slight increase in repair and maintenance activities.
- Heavy rainfall during the quarter has been cited as a significant factor affecting progress and completion of construction projects.
- Despite the decline in output, new construction orders saw a substantial increase, especially in private and public sectors.
- Sector experts express concern over future challenges, including economic conditions and political uncertainties.
In the opening quarter of 2024, construction output in Great Britain faced a 0.9% decline, as estimated by the Office for National Statistics (ONS). This downturn, mirroring the previous quarter’s figures, underscores the persistent challenges within the sector. The primary contributor to this dip was a 1.8% decrease in new construction work, although there was a modest 0.3% growth in repair and maintenance output.
Weather-related disruptions have been identified as a major impediment during this period. Anecdotal evidence points to heavy rainfall in February and March as a key factor behind the reduced output and delays in project timelines, according to the ONS report. This environmental factor, however, did not deter the growth of new orders, which surged by 16%, representing a £1,436 million increase from the previous quarter. Significant contributions came from private commercial new work, which rose by 28% (£700 million), and public sector contracts, which increased by 44% (£536 million).
The price growth rate for construction output was observed to be 1.5% over the twelve months leading up to March 2024, a notable decrease from the peak rates recorded in 2022. Economic forecasts have been adjusted by the Construction Products Association (CPA), anticipating a 2.2% fall in output for the entirety of 2024, a slight adjustment from prior predictions. Scott Motley, a key figure in programme, project and cost management at Aecom, noted that the present downturn challenges notions of recovery, with upcoming economic and political factors likely influencing future developments.
Industry leaders articulate concerns as five out of nine construction sectors reported setbacks in March, with infrastructure contracts experiencing a notable 3.6% decline. Clive Docwra, managing director at McBains, highlighted the struggle of the construction sector to keep pace with the broader economic recovery, which recorded a growth of 0.6% in the same quarter. Political dynamics, especially the forthcoming general election, and economic variables, are expected to create a volatile environment for the industry, according to Docwra.
Despite these challenges, the burgeoning new order books, particularly in short-term repair and maintenance work, offer a glimmer of optimism. The anticipation of reduced interest rates and a more stable economic climate post-election might provide further impetus to the sector. However, the outlook remains cautiously optimistic, with a strategic focus on navigating immediate hurdles while preparing for potential market stabilisation.
The construction sector faces a challenging landscape, with adverse weather and economic conditions impacting output, albeit new orders present opportunities for recovery.
