With the UK in recession, according to the latest ONS Economic Performance Data for Q4 2023, now is the time for the Government to boost construction work to kickstart the economic recovery, says the Federation of Master Builders (FMB).
Quarterly construction output saw a decrease of 1.3% in Quarter 4 (Oct to Dec) 2023 compared with Quarter 3 (July to Sept) 2023; this came solely from a decrease in new work (5.0% fall), as repair and maintenance increased by 4.0%.
Monthly construction output is estimated to have decreased 0.5% in volume terms in December 2023; this came solely from a decrease in new work (1.1% fall), as repair and maintenance increased 0.4% on the month.
Brian Berry, Chief Executive of the FMB said: “The worsening economic picture reflects what has been happening in the construction industry for many months. If the Government is serious about growing the economy, as one of the Prime Minister’s key pledges for the country, we must get the UK building.
“The continued decrease in new work, propped up by growth in Repair, Maintenance, and Improvement (RMI) sector, is a trend which we have seen throughout 2023, and must be rectified if the UK hopes to see long-term sustainable growth going forward. The country is facing a housing crisis, and we need to see vast numbers of new homes built if we are to tackle it.
“The Housing Secretary’s announcement this week on brownfield development could be promising, but the Government must be ambitious to ensure we deliver quality, diverse housing at pace.”
At the sector level, three out of the nine sectors saw a fall in December 2023, with the main contributors to the monthly decrease seen in infrastructure new work, and private housing repair and maintenance, which decreased 6.4% and 1.1%, respectively.
Annual construction output increased by 2.0% in 2023 compared with 2022; this is the third consecutive year of annual growth.
Total construction new orders decreased 13.1% (£1,361 million) in Quarter 4 2023 compared with Quarter 3 2023; this quarterly fall came mainly from the private commercial and industrial sectors, which decreased 18.1 % (£542 million) and 27.6% (£320 million), respectively.
The annual rate of construction output price growth was 3.1% in the 12 months to December 2023; this has slowed from the record annual price growth in May 2022 and June 2022 (10.7%).
