Industry shows 鈥榬esilience鈥� with third consecutive month of expansion
Construction output rose slightly in September despite an overall fall in UK gross domestic product (GDP).
The industry鈥檚 output rose 0.4% according to the Office for National Statistics, the third consecutive monthly of growth for the sector as the country heads towards recession.
Construction was the odd one out of the UK鈥檚 major sectors, with services stagnating and manufacturing down 2.3%.
The 0.6% fall in GDP seen across the economy in September was sharper than the 0.1% fall of the prior month.
The Bank of England recently estimated that the third quarter saw the UK enter a recession that could last until mid-2024.
The growth in construction鈥檚 output rate was slightly slower than the (upwardly revised) 0.6% recorded for August, and was driven mainly by infrastructure and public housing repair and maintenance, which increased 2.8% and 11.3% respectively.
According to anecdotal evidence from the monthly business survey for construction and allied trades, the cost of living crisis continues to be a major factor in the decline of private housing repair and maintenance, for which output dropped 1.1% in September.
Simon Rawlinson, Arcadis, said the figures were a sign that demand 鈥渞emained resilient right up until the turmoil of September 2022鈥� and that this was 鈥渁 good foundation for the industry to enter a slowdown鈥�.
鈥淢arkets will undoubtedly slowdown but a strong 2022 has at least provided a solid cushion of workload,鈥� he said.
David Savage, head of construction at Charles Russell Speechlys noted that this was a 鈥渂ackwards facing view鈥� and that it remained to be seen how the sector reacted to the 鈥減olitical turmoil鈥� triggered by Liz Truss鈥� mini-budget and subsequent resignation.
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McBains managing director Clive Docwra said the sector was continuing to 鈥渄emonstrate resilience鈥� in the face of economic challenges.
鈥淥rder books currently remain strong in many work sectors, and the 5% increase in new orders in private commercial work is a sign that confidence is still in evidence,鈥� he said.
He added that the industry nonetheless faced 鈥渁 rocky road ahead鈥� and said that with projects likely to be curtailed due to falling confidence, 鈥渁 major risk is that crucial efforts to decarbonise building stock could be sidelined鈥�.
鈥淭he government could help by giving the green light to a retrofitting programme, which will not only support the industry but help keep net zero targets on track,鈥� he said.
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