The latest ONS data shows that construction output has fallen for the fourth consecutive month, taking output below the pre-pandemic level in February 2020, is a wakeup call that the construction industry is struggling.
Monthly construction output fell by 1.6% in July 2021 compared with June 2021, falling to £13,660 million, and follows the 1.3% monthly decline in June 2021. This is the fourth consecutive decline in monthly construction output.
In July 2021, anecdotal evidence received from survey returns to the Monthly Business Survey for Construction and Allied Trades suggested that the rising prices of raw materials such as steel, concrete, timber and glass was a contributing factor to the monthly fall in volume terms. Anecdotal evidence also suggested supply chain issues were a factor, with many contributors stating that while order books were healthy, the availability of certain construction products was impacting on projects currently under way.
Industry leaders have called on both government and construction family to pull together to address the current shortage of skills and materials driving the decline in construction.
Brian Berry, Chief Executive of the FMB, said: “Disappointingly, we once again see construction output fall, putting it below pre-coronavirus levels. We know that material price increases and skills shortages are contributing to the decline, with members telling us this is their number one issue. According to a recent FMB survey 98% of builders are facing material price increases.
“Worryingly, new work and repair and maintenance in private housing are the main causes for this decline, which are the backbone of the workload for small builders. I’m concerned that despite the high demand for home improvements, something which could stimulate economic recovery, we see this sector on the decline. We must pull together as an industry and press government to ensure these issues are dealt with quickly.”