Construction output in June 2024 shows signs of recovery, with a 0.5% increase.
- New work and repair/maintenance sectors contribute to the growth.
- Economic conditions and improved weather foster positive output.
- Orders for new constructions rise significantly in the second quarter.
- Increased industry confidence, though skills shortages remain a concern.
The construction industry is exhibiting signs of recovery, as indicated by the official data from the Office for National Statistics (ONS), which revealed a 0.5% rise in output for June 2024. This increment is largely attributed to increases in both new work and repair and maintenance sectors, which grew by 0.9% and 0.1% respectively.
Confidence in the industry’s prospects is augmented by the economic conditions and improved weather that have contributed to this positive growth trajectory. Notably, seven out of nine construction sectors experienced growth during June, as consumers whose expenditure was previously delayed due to the general election, resumed their spending.
In the second quarter of 2024, construction new orders surged by an impressive 16.5% compared to the first quarter. This increase was driven predominantly by non-housing orders, where private commercial ventures such as offices, garages, and shops played a pivotal role, amassing £503 million. There was also a notable rise in infrastructure orders, escalating by 23.4% to £389 million.
The industry is bolstered by confidence in pricing, with the annual construction output price growth standing at 1.9% over the year leading up to June 2024. This aligns with findings from the Federation of Master Builders (FMB), which reported stability and an increase in workload and inquiries among SME builders.
Despite these positive indicators, the sector still faces significant challenges, particularly the ongoing skills shortage. Industry experts argue that a long-term skills plan is essential to sustain and capitalise on the increasing demand. Dr David Crosthwaite, a leading economist, anticipates that the rise in new orders could signal a turnaround for the housing sector, a key contributor to overall construction growth.
The construction sector is poised for recovery, yet must address skills shortages to sustain growth.
