The latest figures from the Office for National Statistics (ONS) show that although overall construction industry output slipped by 0.2% in the three months to November 2023, repair & maintenance output performed strongly.
While new construction projects may have wavered, repair and maintenance (R&M), has quietly become a beacon of stability. A surge in R&M contract awards, up 3.8% in the latest quarter compared to the preceding three months and 12.4% year-on-year, according to the ONS, is helping the construction industry weather the storm.
There was a strong performance across all three sub-sectors in the ONS data with public housing repair & maintenance up 3.7% and a swathe of contracts continue to be let according to Glenigan’s construction industry analysis.
Recent awards include an £18 million deal for R&M Williams from the City & County of Swansea for internal refurbishment of a block of flats at Croft Street (Project ID: 22407764).
The change in regulations after the Grenfell tragedy is also driving more repair & maintenance work on the exterior of high rise buildings. Graham, for example, started work in the latest quarter on a £28 million deal to re-clad Blashford Tower on the Chalcroft estate in North London for Camden Council (Project ID: 21044657).
Carbon reductions
One area of the repair & maintenance sector that is also continuing to increase is work that is part of the drive to reduce carbon emissions.
Sovereign Housing Association has awarded an £11.4 million deal for decarbonisation and retrofit works across its estate (Project ID: 24041001) and a £60 million framework to deliver domestic energy efficiency measures set up by Portsmouth City Council recently started (Project ID: 22158886)
Road to growth?
Non-housing repair & maintenance work grew by 4% in the latest ONS data and Glenigan’s data suggests that civil engineering work is helping this rise.
The latest Glenigan Index covering both new build and maintenance projects starting on site in the three months to January 2024 showed a decline. However, at an underlying level – projects valued at £100 million or less – there were some indications of improvement in civil engineering, buoyed by term maintenance agreements.
Glenigan economics director Allan Wilen said: “A decline in public sector areas such as in health and education has contributed to the overall drop. More encouragingly, civil engineering starts have stabilised against the preceding three months.”
The highways sector has produced a number of term maintenance deals valued below £100 million that were awarded in the latest quarter.
These include a £16 million highways framework for Stoke-on-Trent City council, which has recruited 18 contractors for the four-year deal (Project ID: 24026379).
Elsewhere, Somerset County Council has appointed Octavius to a £21 million highways assets framework (Project ID: 24020572) and Worcestershire County Council has signed up Jacobs for a £65 million five-year highways professional services term contract (Project ID: 22121595).
While some clients may be wary of committing to new build projects, those with repair & maintenance responsibilities need to renew these term contracts. So, with private housing repair & maintenance output also increasing by 3.5% in the three months to November 2023 according to the ONS, this stream of work should help keep the construction industry busy at a difficult time.
