Despite many signs of a boom, construction output in Great Britain fell by 0.2% in August 2021

Construction’s post-Covid recovery now looks to be over.

The output graphs show, unsurprisingly a near vertical decline with the arrival of Covid-19 virus in the UK in early 2020 and the subsequent national lockdown in spring.  Then from May 2020 to April 2021 there was an almost equally dramatic rise to return to near ‘normal’ levels of output.

Since April, however there has been a broadly steady decline in construction output as shortages and price rises suppress activity.

According to the Office for National Statistics’ latest bulletin, monthly construction output fell 0.2% (£30m) in volume terms in August 2021 in Great Britain to £14,243m, with the level of output now 1.5% below its pre-pandemic (February 2020) level. This follows a revision to the July numbers, previously put at a 1.6% decline on June, now adjusted to a 1.0% decline.

The level of construction output in August 2021 was 1.5% (£214m) below the February 2020 pre-pandemic level; new work was 3.7% (£348m) below the February 2020 level, while repair & maintenance work was 2.7% (£135m) above the February 2020 level.

The recovery to date, since the start of the pandemic, is mixed at a sector level, with infrastructure 45.4% (£852m) above and private commercial 26.3% (£656m) below their respective February 2020 levels in August 2021.

For the three months to August 2021, construction output fell 1.2%, driven by a fall in repair & maintenance of 4.7%.

Since January 2021 prices for construction work have increased by 4.8%, on average. For new housing, the figure is 7.6%.

Despite declining output, contractors and building trades seem to be inundated with work, and materials producers are struggling (in many cases failing) to satisfy demand. It feels like the industry is booming but the statistics suggest we could technically soon be in recession.

Read more at The Construction Index.