In August, construction output in the UK experienced a modest increase, rebounding from previous declines. This growth was driven largely by private housing and commercial projects.
- Construction output increased by 0.4% in August, recovering from a July contraction.
- Private housing activity surged by 3.4%, marking a significant segment of overall growth.
- New commercial projects grew by 2.2%, contributing to the positive trend.
- Despite growth in some sectors, repair and maintenance work declined by 1%.
- The broader economic outlook, bolstered by planning reforms and improved borrowing terms, offers confidence.
The construction sector in the UK experienced a slight uplift in August, with output increasing by 0.4% following a similar contraction in July. Newly released data from the Office for National Statistics highlight that private housing developments played a critical role in this recovery, with workloads expanding by an impressive 3.4%.
Commercial ventures also witnessed a favourable trajectory, with new work in this domain rising by 2.2%. Collectively, new construction efforts saw a rise of 1.6% across the board. Meanwhile, the repair and maintenance sector showed a downturn, with a reduction of 1% in activities, indicating a divergence in sector performance.
The overall monetary value of construction efforts in August was recorded at £18.6 billion. Significant contributions came from new private housing valued at £3.6 billion, followed by new infrastructure projects at £3.1 billion, and private housing repair and maintenance contributing £2.9 billion.
In a quarterly comparison leading up to August, construction output showed a growth of 1%, propelled by a 1.7% increase in new project initiatives, although the repair and maintenance sectors stagnated with no measurable growth.
Industry figures such as Fraser Johns from Beard have noted the encouraging signs of investment and growth within the context of a broader economic improvement. He emphasises the need for caution, acknowledging ongoing challenges and anticipating the Autumn Budget’s potential impact on the industry and economy at large. Meanwhile, Clive Docwra from McBains expressed relief at the August figures, highlighting that the uptick in private housing and commercial work signals a gradually improving economic climate.
Despite the promising metrics, current conditions are described as fragile, with returning confidence in various sectors, aided by expected planning reforms and lower borrowing costs. The upcoming budget is anticipated with optimism, hoping for measures that will further stimulate growth.
The modest growth in August’s construction sector reflects a hopeful yet cautious economic recovery.
