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Construction Output In Great Britain - June 2023

11th August 2023

Photograph of Construction Output In Great Britain - June 2023

Monthly construction output is estimated to have increased 1.6% in volume terms in June 2023; this came from increases in both new work (2.0%) and repair and maintenance (1.1%) on the month.

At the sector level, six out of the nine sectors saw a rise in June 2023, with the main contributors to the monthly increase seen in infrastructure new work and non-housing repair and maintenance, which increased 4.7% and 3.4%, respectively.

Quarterly construction output increased 0.3% in Quarter 2 (Apr to June) 2023 compared with Quarter 1 (Jan to Mar) 2023; the increase came solely from June 2023, with an increase in repair and maintenance (0.9%), while new work saw a decrease of 0.1%.

Total construction new orders decreased 7.1% (£786 million) in Quarter 2 2023 compared with Quarter 1 2023; this quarterly fall came mainly from public other new orders and infrastructure new orders, which fell 32.9% (£576 million) and 26.5% (£519 million), respectively.

The annual rate of construction output price growth was 4.6% in the 12 months to June 2023; this has slowed from the record annual price growth in May 2022 (10.4%).

Construction output in June 2023
Monthly construction output increased 1.6% in June 2023. This follows three consecutive falls in monthly construction output. This is the highest level of construction output (£15,620 million) since records began in January 2010.

Month-on-month construction output growth in June 2023
The 1.6% rise in construction output in June 2023 represents an increase of £249 million in monetary terms compared with May 2023, with six out of the nine sectors seeing an increase on the month.

Infrastructure new work and non-housing repair and maintenance were the largest positive contributors to the monthly increase in June 2023, increasing 4.7% (£116 million) and 3.4% (£102 million), respectively.

This is the fourth consecutive monthly increase in infrastructure new work. Anecdotal evidence suggests continued strength in this sector, with warm weather allowing construction project work to progress in June 2023.

Quarter-on-quarter construction output growth in Quarter 2 (Apr to June) 2023
Alongside the monthly increase, construction output rose by 0.3% (£137 million) in Quarter 2 2023. This is the seventh quarter of consecutive growth in the quarterly series since Quarter 3 (July to Sept) 2021 (1.6% fall), however, the quarterly growth has slowed in comparison with the first half of 2022.

The quarterly growth came solely from an increase in repair and maintenance (0.9%), as new work saw a decrease of 0.1%.

The quarterly increase came solely from June 2023, as the other two months of Quarter 2 2023 saw decreases. Anecdotal evidence highlighted the effect of weather, with firms noting that warm weather conditions increased output.

Of the nine sectors, five saw increases in Quarter 2 2023, with the largest contributors being infrastructure new work, and non-housing repair and maintenance. These sectors increased 6.1% (£433 million) and 2.7% (£246 million), respectively.

The largest negative contributor was private new housing, which fell 3.3% (£324 million).

New orders in the construction industry in Quarter 2 (Apr to June) 2023
In Quarter 2 2023, total construction new orders decreased by 7.1% (£786 million) compared with Quarter 1 (Jan to Mar) 2023. This is the third consecutive fall in total construction orders, with Quarter 2 2023 being the lowest level (£10,222 million) since Quarter 4 (Oct to Dec) 2020 (£9,797 million). More information can be found in our New orders in the construction industry dataset.

Other new work new orders (non-housing) was the largest contributor to the decrease in Quarter 2 2023, as it fell by 11.3% (£903 million). This mainly came from public other new work new orders, which decreased by 32.9% (£576 million) and was driven by falls in health, and schools and colleges. The other largest negative contributor was infrastructure, which decreased 26.5% (£519 million). Private commercial saw an increase of 14.3% (£385 million), which was the largest growth out of all seven sectors.

Housing new orders saw an increase of 3.9%. This came from both private and public housing, which saw increases of 3.6% (£97 million) and 5.8% (£21 million), respectively.

Evidence from our data suppliers, Barbour ABI, suggests that the fall in new orders is because of the cost-of-living crisis and the related slowdown in the wider economy. This caused uncertainty in the commercially sensitive construction sectors, along with a slowdown in the award of government contracts in traditional heavy infrastructure (rail and road).

Read the full report HERE