Home News ONS figures point construction on road to recovery, but pitfalls could still...

A potential easing in supply chain issues has delivered construction’s highest overall output since September 2019, but rising costs could still cause problems for the sector, warns the Federation of Master Builders (FMB) in response to the latest ONS figures.

Brian Berry, Chief Executive of the FMB, said: “Construction continues to recover after what has been a turbulent time for the industry. In particular the RMI market, which is the mainstay of small, local builders’ workload, continues to remain above pre-pandemic levels, which is good to see. The uplift in the market seems to suggest that it is now getting easier to obtain materials and a lucky spell of clear weather has allowed construction to continue without hinderance.

“However, we know from recent FMB data that building materials and skills pressures have slowed projects for 89% of FMB members. Even more concerning is rising inflation as the increased cost of construction materials will hit the pockets of the small builders who run to tight margins, and will increase prices for customers already facing rising bills.”

Monthly construction output increased by 3.5% in volume terms in November 2021, which is the largest monthly rise seen in construction output growth since March 2021; anecdotal evidence from survey returns suggested the strong demand for work, in combination with supply chain bottlenecks for certain products easing and the unseasonal mild and dry weather were the main reasons for the increase.

The increase in monthly construction output in November 2021 came solely from an increase in new work (5.7%) as repair and maintenance saw a slight decline  of 0.2% on the month.

Because of the strong November 2021 monthly growth and minimal revisions to previous months, the level of construction output in November 2021 was 1.3% (£197 million) above the February 2020 pre-coronavirus (COVID-19) pandemic level; although new work was 1.6% (£148 million) below the February 2020 level, repair and maintenance work was 6.9% (£345 million) above the February 2020 level.

The recovery to date, since the falls at the start of the pandemic, is mixed at a sector level, with infrastructure 49.3% (£923 million) above and private commercial 28.0% (£698 million) below their respective February 2020 levels in November 2021.

Alongside the monthly increase, construction output rose 1.6% in the three months to November 2021, the first three-monthly increase since July 2021, with similar increases seen in both new work, and repair and maintenance (1.5% and 1.6% respectively).


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