Construction Output In Great Britain - December 2023, New Orders And Construction Output Price Indices, October To December 2023

15th February 2024

Short-term measures of output by construction industry in December 2023, contracts awarded for new construction work in Great Britain and a summary of the Construction Output Price Indices (OPIs) in the UK for Quarter 4 (Oct to Dec) 2023.

Quarterly construction output saw a decrease of 1.3% in Quarter 4 (Oct to Dec) 2023 compared with Quarter 3 (July to Sept) 2023; this came solely from a decrease in new work (5.0% fall), as repair and maintenance increased by 4.0%.

Monthly construction output is estimated to have decreased 0.5% in volume terms in December 2023; this came solely from a decrease in new work (1.1% fall), as repair and maintenance increased 0.4% on the month.

At the sector level, three out of the nine sectors saw a fall in December 2023, with the main contributors to the monthly decrease seen in infrastructure new work, and private housing repair and maintenance, which decreased 6.4% and 1.1%, respectively.

Annual construction output increased by 2.0% in 2023 compared with 2022; this is the third consecutive year of annual growth.

Total construction new orders decreased 13.1% (£1,361 million) in Quarter 4 2023 compared with Quarter 3 2023; this quarterly fall came mainly from the private commercial and industrial sectors, which decreased 18.1 % (£542 million) and 27.6% (£320 million), respectively.

The annual rate of construction output price growth was 3.1% in the 12 months to December 2023; this has slowed from the record annual price growth in May 2022 and June 2022 (10.7%).

Construction output in December 2023
Monthly construction output is estimated to have decreased 0.5% in volume terms in December 2023. This is the third consecutive fall in monthly construction output, which resulted in a quarterly fall of 1.3%.

Quarter-on-quarter construction output growth in Quarter 4 2023
Construction output fell by 1.3% (£599 million) in Quarter 4 (Oct to Dec) 2023. This is the largest negative growth in the quarterly series since Quarter 3 (July to Sept) 2021 (1.8% fall). The quarterly fall came solely from a decrease in new work (5.0%), as repair and maintenance saw an increase of 4.0%.

The quarterly decrease came from all three months of the quarter. Anecdotal evidence suggested negative effects of adverse weather across each month, including heavy rainfall, strong winds, cold temperatures and frost decreasing new work. Evidence also suggests that these weather effects led to increases in repair work across the repair and maintenance sectors.

Of the nine sectors, four saw decreases in Quarter 4 2023, with the largest contributors being private new housing, and infrastructure new work. These sectors decreased 8.0% (£698 million) and 7.5% (£558 million), respectively.

The largest positive contributor was private housing repair and maintenance, which increased 4.3% (£325 million).

Infrastructure new work, and private housing repair and maintenance were the largest negative contributors to the monthly decrease in December 2023, decreasing 6.4% (£149 million) and 1.1% (£29 million), respectively.

Year-on-year change in construction output in 2023
Total annual construction output increased 2.0% in 2023 compared with 2022. This is the third consecutive year of annual growth.

The annual increase in 2023 was solely because of a rise in repair and maintenance, which rose 8.3%, as new work decreased 2.1%.

At the sector level, seven of the nine sectors saw an increase in annual growth in 2023. Non-housing repair and maintenance, and private housing repair and maintenance were the largest positive contributors. The main negative contributor to annual growth was private new housing, which saw falls in 10 out of the 12 months of 2023.

New orders in the construction industry in Quarter 4 2023
In Quarter 4 (Oct to Dec) 2023, total construction new orders decreased by 13.1% (£1,361 million) compared with Quarter 3 (July to Sept) 2023. This is the lowest level of total construction new orders (£9,007 million) since Quarter 2 (Apr to June) 2020 (£6,101 million), when coronavirus (COVID-19) lockdown restrictions were in place. More information can be found in our New orders in the construction industry dataset.

Other new work new orders (that is, non-housing) was the largest contributor to the decrease in Quarter 4 2023, decreasing by 14.7% (£1,056 million). This mainly came from private commercial new orders, which decreased by 18.1% (£542 million) and was driven by decreases in offices, agriculture, miscellaneous, and shops. The other main contributor to the decrease in other new work was private industrial new orders, which saw a decrease of 27.6% (£320 million).

Housing new orders saw a decrease of 9.5%. This came solely from private new housing which decreased by 14.4% (£402 million), as public new housing saw an increase of 23.5% (£98 million).

Read the full ONS report HERE