Activity remains almost 11% below pre-lockdown levels

Construction鈥檚 recovery slowed down in August, according to the latest Office for National Statistics figures.

Monthly construction output growth slowed to 3% in August, following record monthly growth of 21.8% in June and growth of 17.2% in July.

New work grew 3.5%, or 拢270m, with repair and maintenance growing 2.3%, or 拢98m.

The increase in new work was driven by growth of 12%, or 拢310m of work, in private new housing, off set somewhat by falls of 16.4%, or 拢54m, in private industrial new work and 2%, 拢40m, in private commercial new work. 

Figure 6_ Private new housing was the largest contributor to the monthly increase in all work in August 2020

The level of construction output in August remains 10.8% below the level in February.

Mark Robinson, chief executive at Scape Group, said: 鈥淐onfirmation of further growth will hearten many in the industry whose determination continues to keep order books healthy, albeit below pre-covid levels.

鈥淗owever, the overall economic outlook remains ominous and construction will be expected to drive the ongoing recovery as other sectors regroup and evolve as government support recedes.鈥�

> Previous ONS data: July growth

He said while the UK鈥檚 strategy was to use historically low interest rates to invest in public infrastructure it was imperative that contractors and public sector organisations did all they could to get spades in the ground quickly.

Following strong recovery in June and July construction, output grew by a record 18.5% in the three months to August compared with the previous three-month period.

This came after 10 consecutive periods of decline and was driven by record three-month on three-month growth in both new work, 17.5%, and repair and maintenance, 20.3%.

The unpredictability around further lockdowns is causing private commercial investors to remain cautious

Clive Docwra, McBains

The increase in new work in the three months to August was because of growth in all new work sectors apart from private industrial, which fell by 6.5%. The largest contributor to the growth was private new housing, which grew 34.9%.

Figure 3_ All construction sectors grew in the three months to August 2020, apart from private industrial new work

The increase in repair and maintenance across the same period reflects record growth in all repair and maintenance sectors. The largest contributor was private housing repair and maintenance, which grew 35.6%.

Despite this three-month growth figures Clive Docwra, managing director at McBains, said there was a reluctance among investors to put cash into future projects. 

He said: 鈥�The unpredictability around further lockdowns is causing private commercial investors to remain cautious of committing to new developments.

鈥�The government needs to ramp up its public infrastructure programme and speed up procurement to help tide the sector over while this fragility persists.鈥�

Figure 5_ Record growth in all repair and maintenance sectors drove the strong growth in the three months to August 2020

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