MONTHLY CONSTRUCTION OUTPUT boomed in November 2021 as it increased by 3.5% in volume – the largest monthly rise seen in construction output growth since March 2021.
Anecdotal evidence from survey returns suggest the strong demand for work, in combination with supply chain bottlenecks for certain products easing and the unseasonably 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. However, new work was 1.6% (£148 million) below the same level, but repair and maintenance work was 6.9% (£345 million) above it.
The recovery to date, since the falls at the start of the pandemic, is mixed at a sector level. Infrastructure is 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).
The Right Direction
Fraser Johns, finance director at Beard said: “The growth in output in November is certainly encouraging that the construction sector is moving in the right direction. A major positive is that in the three months prior to November, output in the sector increased and a stable sustained period of growth is key for the industry.
“As ever, client confidence plays an important role, and demand for new work was the driving force as construction recorded a positive month.
“To ensure this confidence doesn’t dip, close collaboration with suppliers has been, and will continue to be absolutely critical in the coming months. When there are inevitably delays for some materials, by working together creative solutions can be found that ensures projects are kept on track.”
Rising Inflation Concern
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.”