News

Commercial work drives highest growth in output since September 2020

Source: Office for National Statistics – Construction Output and Employment

A 4% increase in private commercial new work helped to drive a 1.5% month-on-month rise in new construction work in February 2021, official figures have revealed.

Together with a 1.9% month-on-month increase in repair and maintenance, the uptick in new work helped push overall construction output up by 1.6% month-on-month - its highest monthly growth since September 2020 when it grew by 1.8%.

But the level of construction output in February 2021 was still 4.3% below the pre-pandemic level recorded in February 2020, while new work was 7.8% below its level 12 months earlier. However, repair and maintenance was 2.2% above the February 2020 level.

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New work increased in all sectors in February 2021, other than infrastructure, which fell by 3.4%.

The monthly increase in repair and maintenance of 1.9% in February 2021 was thanks to growth in private and non-housing repair and maintenance, which grew by 4.7% and 2.6% respectively, offsetting an 8.6% fall in public housing repair and maintenance.

Construction output fell by 1% in the three months to February 2021 compared with the three-month period because of a 1.6% fall in new work and 0.1% fall in repair and maintenance.

The Office for National Statistics said it had revised the 2020 annual construction growth figure down by 1.5 percentage points to an annual decline of 14%, making it the largest decline in annual growth since annual records began in 1997.

Commenting on the figures, Fraser Johns, finance director at Beard, said: “There is a lot of optimism around this week, and rightly so with the reopening of our retail sector and a successful vaccine roll-out.

“The highest level of growth month-on-month since September at 1.6% certainly provides hope that we are heading in the right direction in terms of a roadmap out of the crisis. And compared to the rate of growth of the economy overall at 0.4%, the construction sector has performed well.

“However, in the three months to February output actually fell by 1% and the month was 4.3% down on the same point last year. We also had the warning from the Construction Leadership Council last week that shortages of building products and materials are set to get worse before they get better.

“So, while the rate of growth we see from today’s figures provides a welcome shot in the arm for the construction industry, it’s more important than ever to ensure good relationships with suppliers, including adherence to the prompt payment code. This will help to create the solid foundations needed for growth this year.”