The Government is facing renewed calls for quick and effective action to tackle the continuing decline in construction output across the UK.
The latest official ONS figures show that following the 1.4% decrease in June 2022, monthly construction output decreased 0.8% in volume terms in July 2022.
It is the second consecutive decrease in monthly construction output after seven consecutive months of growth and resonates with other recent surveys from the likes of Glenigan and S&P Global / CIPS UK Construction PMI which also show the industry in steady decline.
The ONS states that the decrease in monthly construction output in July 2022 came solely from a decrease in repair and maintenance (2.6%) as new work saw a slight increase (0.3%) in the month.
At the sector level, the main contributors to the decrease seen in July 2022 were public housing new work, and public and private housing repair and maintenance, which decreased 13.1%, 8.0% and 2.6%, respectively.
The level of construction output in July 2022 was 2.1% (£300 million) above the February 2020 pre-coronavirus (COVID-19) pandemic level; new work was below at 1.9% (£181 million) its February 2020 level, while repair and maintenance work was 9.7% (£481 million) above the February 2020 level.
Despite the monthly decrease, construction output increased 1.4% in the three months to July 2022; this came solely from an increase seen in new work (2.7%) as repair and maintenance saw a slight decrease (0.7%); this is the ninth consecutive period of growth in the three-month-on-three-month series, but the slowest rate of growth since the three months to December 2021 (1.0%).
The figures follow earlier survey results from the ONS which point to a significant uptick in housebuilding during 2022. But that increase is tempered by the fact prior to this year housebuilding suffered a slump between 2020 to 2021 similar amount to the 2008 financial crisis that had such a devastating impact on developers and the property market.
In response to the previous surveys, Brian Berry, Chief Executive of the FMB said the industry has returned to its pandemic levels of activity.
“As the cost-of-living crisis deepens, consumers are cutting back, but builders also face increased costs on materials,” he continued. “This creates a difficult and clearly damaging situation. Bold solutions are required by the new Government under Liz Truss.
“Delivering a UK wide retrofit strategy to improve the efficiency of the nation’s homes would be a huge boost for local builders and local economies alike. It would also cut homeowners bills and help ensure the UK’s energy security.
“More immediately we urge the Government to remove VAT on repair, maintenance and improvement work so that savings can be passed on to cash strapped consumers.”
