Decline in construction output points to on-going challenges for industry

Latest News Thu, Sep 12, 2024 6:10 AM

The continued lack of growth across the wider economy and the slight decline in construction output as reported in the ONS Data for July 2024 is a clear sign that the UK economy is still struggling, says the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, said it was disappointing to see activity in the construction industry contracting, following what had been a promising start to the summer.

Monthly construction output is estimated to have decreased 0.4% in volume terms in July 2024; this follows an increase of 0.5% in June 2024.

The decrease in monthly output came from falls in both new work (0.2%) and repair and maintenance (0.7%).

At the sector level, monthly output fell in five out of the nine sectors in July 2024, with the main contributors to the monthly decrease coming from private commercial new work and private housing repair and maintenance, which fell by 2.4% and 1.7%, respectively.

Construction output is estimated to have grown by 1.2% in the three months to July 2024; this came from increases in both new work (1.6%), and repair and maintenance (0.8%); the increase in construction output in the three months to July 2024 came from increases in May 2024 (1.7%) and June 2024 (0.5%).

“The 0.4 per cent overall decline, coming from falls in both new work and repair and maintenance, is a worrying sign that challenging times remain ahead for the construction industry, especially with today's announcement showing that the UK economy is flatlining,” said Brian Berry.

“Improving market conditions play a vital role in boosting confidence, and it is crucial the Government prioritises economic stability.

“Following the recent General Election it has been encouraging that the new Government is making house building a key priority. The early announcements setting ambitious housing targets and proposing significant planning reforms are promising. However, the UK is currently experiencing a serious skills crisis which is affecting all sectors.

“Delivering a long-term skills plan to significantly boost the numbers of construction workers will be key in growing capacity, delivering stability, and making these goals a reality.”

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