Construction output increased by 0.5% in June 2024 compared with the previous month, according to the latest ONS data.
New work output was up by 0.9%, while repair and maintenance (R&M) work increased by 0.1%.
On an annual basis, new work output in June 2024 was down by 6.6% on June 2023. R&M output was up by 5.5% on the same period.
In new work, there were annual decreases in all sectors apart from private commercial.
The largest increase in monthly output was in the public other new work sector (3.3%), whilst, on an annual basis, R&M for non-housing projects indicated the largest increase (8.0%).
ONS cited the mixed effects of the weather on construction activity in June, with the Met Office confirming there were scattered showers throughout the month, as well as warmer weather. Anecdotal evidence from ONS’s Monthly Business Survey for Construction and Allied Trades also pointed to customers holding off on spending during the general election period.
The output figures for June complete the data for 2Q2024. R&M showed growth, but not enough to counteract the fall in new work, with overall construction output down by 0.1% on the previous quarter, and down by 1.0% on 2Q2023.
On a quarterly basis private industrial and private commercial were the only sectors to show an increase in new work output, while non-housing R&M was also up on 1Q2024.
Dr David Crosthwaite, Chief Economist at BCIS, said: “There’s no real surprise with the latest output data, which shows the construction sector continued to struggle in June. While new work growth picked up on a monthly basis, it maintained its downward trajectory quarterly and annually and, until the investment climate improves, is likely to continue to flat-line.”
Across the wider economy, GDP is estimated to have grown by 0.6% in 2Q2024 compared with 1Q2024, following an increase of 0.7% in the previous quarter. While production output also fell by 0.1% alongside construction in the quarter, services output was up by 0.8%.
Dr Crosthwaite said: “It’s better news for the wider economy, which maintained quarterly growth levels, and could see above 2% GDP growth for the year as the UK continues its robust recovery from recession.”
Meanwhile, total construction new orders increased by 16.5% in 2Q2024 compared with 1Q2024, with over £12.5 billion of work, the highest level of new orders since 4Q2022.
The Office for National Statistics (ONS) quarterly data shows public new housing saw a 94.6% increase, though this was largely due to the figure in 1Q2024 being the lowest since 3Q2020, while the annual increase was a more modest 13.9%.
The private housing sector saw a 11.5% increase in new orders, with over £2.8 billion of work, the highest level since 4Q2022.
On an annual basis, new orders were up across the board, with the most significant increase in the public – other new work, infrastructure and private commercial sectors.
Dr Crosthwaite said: “A significant uptick in new orders in the second quarter is good news for construction and should translate into an increase in output over the next few quarters. The most encouraging data is the increase in housing orders, which had suffered significant declines in output since the pandemic.
“This could herald a change of fortunes for the housing sector, the largest of all the construction sub-sectors and a key engine of growth for construction overall.”
