CONSTRUCTION OUTPUT fell 2.0% in April 2021 following a particularly strong increase in March (5.8%), and output now stands slightly above its pre-pandemic February 2020 level.
New work continues to be subdued but the level of repair and maintenance is stronger.
April’s £290m decrease in output was a result of declines in both new work (2.9%) and repair and maintenance (0.6%).
However, the level of construction output in April 2021 remains 0.3% above the February 2020 pre-pandemic level despite the monthly fall; while new work was 3.4% below the February 2020 level, repair and maintenance work remains 7.1% above the February 2020 level.
Construction output in April 2021
Monthly construction output fell by 2.0% in April 2021 compared with March 2021, falling to £13,961 million. It was the first month-on-month fall since December 2020.
April’s fall follows comparatively strong growth of 5.8% in March 2021.
Despite the 2.0% fall in April 2021, the level of construction output remains 0.3% (£44 million) above its February 2020 pre-pandemic level.
Repair and maintenance continues to flourish, at 7.1% (£348 million) above the February 2020 level.
New work is yet to recover fully and remains 3.4% (£305 million) below the pre-pandemic mark.
Infrastructure is the only sector in the new work category to have recovered above its February 2020 pre-pandemic level, at 21.2% (£386 million) above it.
Overall, new work fell by 2.9% (£261 million) in April 2021 compared with March 2021. Private new housing was the largest contributor to the monthly decline, falling by 11.1% (£352 million).
Private housing repair and maintenance and private commercial new work also saw large month-on-month falls of 7.1% (£144 million) and 6.2% (£134 million) respectively.
Repair and maintenance work fell by 0.6% (£29 million) in April 2021. Private housing repair and maintenance drove the monthly decline in repair and maintenance falling by 7.1% (£144 million). In comparison, non-housing repair and maintenance grew by 4.6% (£120 million), which was the largest growth since July 2020.
Three Months Figure
Taking the three months to April 2021, construction output grew by 5.1% (£2,005m), which was the highest growth since the period August – November 2020.
Gareth Belsham, director of the national property consultancy and surveyors Naismiths, commented: “Growth stumbled in April but in an industry already at a full sprint, few will be concerned.
“Even with April’s surprise decline in output, overall construction activity is still higher than its pre-pandemic level and sentiment remains very strong – with many builders’ order books looking healthier than they have done in years.
“Nevertheless April’s fall will have served as a reality check. Private sector housebuilding, which has roared back since the start of the year, saw output dip by 11% compared to March.
“Fortunately infrastructure work moved by the same amount in the opposite direction, but such volatility reveals the mixed fortunes within an industry grappling with severe supply side issues.
“Average wages are rising as employers fight to lure workers, and material costs are surging as demand far exceeds supply.
“The difficulty of getting hold of key materials like steel and timber risks knocking existing projects off course and is pushing up tender prices for future work.
“But frustrating though these issues are, they are growing pains for an industry well versed in handling boom and bust. The phenomenal rate of growth seen in the early months of 2021 was always going to be hard to maintain, and overall things are settling into a better rhythm.
“While April’s month-on-month fall is disappointing, the 5.1% quarterly rate of expansion is a huge achievement and the industry’s recovery from a punishing 2020 remains broadly on track.”
Clive Docwra, Managing Director of property and construction consultancy McBains, said: “Output falling by 2.0% in April is a cause for concern for the construction sector, but may reflect the fact that growth over March was higher than expected.
“Today’s figures also show that although confidence is returning to the construction sector, this remains delicate and growth in specific work sectors is mixed. While overall output remains just above pre-pandemic levels, driven by an increase in repair and maintenance work, new work contracts declined which bucks recent growth trends.
“Private new housing work was the largest contribitutor to this fall, which will pose a risk to the Government’s housebuilding targets.”
Fair access to materials
Brian Berry, Chief Executive of the FMB, said: “That construction output in April was 0.3% above its pre-pandemic levels points to encouraging signs for the industry’s recovery. However, it’s clear that the shortage of construction materials, and rising prices, are impacting small builders most severely and threatens many businesses’ survival as we emerge from lockdown.
“Against the backdrop of high levels of inquiries for building work, it’s imperative that smaller businesses have the same access to materials as the larger firms during these difficult times.”