In July 2024, construction output in Great Britain declined by 0.4% in volume, according to the Office for National Statistics (ONS).
- This decrease comes after consecutive increases in May and June, raising concerns in the industry.
- The decline affected both new work and repair and maintenance sectors, with a combined impact.
- Macroeconomic stagnation in July coincided with the general election period, further complicating the outlook.
- Industry leaders cite optimism from government announcements despite the mixed economic signals.
The latest data from the Office for National Statistics reveals that construction output in Great Britain fell by 0.4% in volume terms during July 2024. This decline marks a stark contrast to the growth observed in May and June, which saw increases of 0.5% and 1.7% respectively. Industry analysts were taken by surprise, considering the positive trajectory earlier in the summer.
The reduction in output is attributed to decreases in both new work and repair and maintenance sectors, which fell by 0.2% and 0.7% respectively. The private commercial new work and private housing repair and maintenance sectors were the most impacted, with declines of 2.4% and 1.7%. These figures highlight the challenges faced across different facets of the construction industry.
Notably, July was a month of general election in the UK, contributing to economic stagnation. During this period, the overall economy showed zero growth in gross domestic product for the second consecutive month. The growth in the services sector was insufficient to counterbalance the downward trends in construction and manufacturing.
Construction output experienced a fall in five out of the nine sectors evaluated. Despite the monthly decline, the ONS noted that over the three months leading up to July, construction managed a 1.2% growth in output, spurred by increases in new work (1.6%) and repair and maintenance (0.8%). This mixed performance suggests a complex economic landscape that industry players must navigate.
Clive Docwra, the managing director of McBains, a property and construction consultancy, commented on the situation: “After May and June’s figures showed an increase in output, the construction industry was expecting better news for July.” The 2.4% drop in private commercial new orders particularly raised alarm within the industry. Docwra expressed cautious optimism, pointing to government pronouncements about housebuilding as potential positive influencers for the medium term.
The ONS data underlines the nuanced challenges within the construction sector amid broader economic uncertainties.
