Commentary on ONS output in construction figures

Commentary on ONS output in construction figures
  • Construction output fell 1.8% in volume terms in October 2021, this is the largest monthly decline since April 2020 when output fell by 41.7%; new work fell (2.8%) from September to October 2021 while repair and maintenance remained unchanged (0.0%).
  • Like recent months, anecdotal evidence in October 2021 from businesses continues to suggest that product shortages caused by supply chain issues leading to subsequent price rises in raw materials such as steel, concrete, timber and glass, were an important reason for the decline.
  • At the sector level, the main contributors to the decline in monthly output in October 2021 were infrastructure and private new housing, which decreased 7.1% and 4.4% respectively; these decreases were partially offset by increases in private industrial and public other new work of 8.8% and 7.0% respectively.
  • In line with the monthly fall, construction output fell by 1.2% in the three months to October 2021; this was because of a 1.5% fall in repair and maintenance (mainly because of a 3.5% fall in non-housing repair and maintenance) and a fall of 1.0% in new work (with new housing (both public and private), public other new work, and private commercial new work all falling).

Allan Callaghan, Managing Director of Cruden Building, part of the Cruden Group said:

“While the latest construction output figures have declined this month, we are beginning to see some green shoots of recovery in the sector.  This is largely due to many significant construction projects nearing completion so it’s important that the industry maintains this momentum with a strong pipeline of new building projects to help with the ongoing recovery into next year. At Cruden, we have secured a healthy construction pipeline for 2022, particularly as we are included in a number of important procurement frameworks coupled with a robust housing market across central Scotland.

“Logistical difficulties, arising from material and labour shortages, remain prevalent throughout the sector.  That’s why we are putting our continued focus and investment in our apprentices and the lifelong development of employees through our Cruden Academy in order to help mitigate against the impact of these industry challenges.”

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Commentary on ONS output in construction figures
BDC June 2022 issue - 293

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