According to the latest figures released by the Office of National Statistics, monthly construction output fell by 0.4% in October.
This largely due a wider decline in repair and maintenance, which fell by 1.3%, as new work increased by 0.2%.
This follows on from September’s 0.1% increase in output. The ONS stated that four of the nine construction sectors it monitors saw a decline in October, with the largest decline occurring in the private housing repair and maintenance, which dropped by 3.8%.
However, the outlook was more positive on a quarterly basis, as construction output increased by 0.4% in the three-month period to October, making it the fastest growing sector of the economy.
This was driven by higher volumes of new construction projects, which increased by 1.7%, while repair and maintenance wok fell by 1.2%.
Services grew by only 0.1% while production fell by 0.3% over the three-month period to October. And according to the ONS, the economy grew by a little over 0.1% over the same period.
Bloom Building Consultancy director Charlotte Whincup says: “Construction has held onto its crown as the fastest growing industry in Britain’s shrinking economy, but its grip is loosening.
“Its growth of 0.4% in the three months to the end of October was respectable rather than rip-roaring, and comfortably above the feeble 0.1% expansion posted by the economy as a whole during the quarter.”
She adds: “Today’s official data confirms for the first time how badly things slowed in the weeks leading up to the Budget. Nearly half of the construction industry’s sub-sectors contracted during October, and output across construction as a whole shrivelled by 0.4% on the month.
“The data also shows just how divergent the fortunes of different parts of the industry have become. Commercial property is holding its own and demand from infrastructure projects remains strong, but housebuilding saw further declines in output.”
“All this underlines what a mountain the Government has to climb with the planning reforms it hopes will kickstart a flurry of housebuilding across the greenbelt.
“The high cost of land and planning red tape are only parts of the puzzle of course – the high cost of finance is another. If there is one ray of light from Britain’s shrinking economy, it’s that it may strengthen the Bank of England’s resolve to keep trimming interest rates in 2025. Making it cheaper for developers to buy land and build homes will go a long way towards re-energising the battered residential construction sector.”
