Housing leads construction recovery but output still far lower following covid crisis

Housing activity rallied in May but remains far below pre-covid levels, according to the latest data from the Office for National Statistics.

Overall construction output increased by 8.2% in May compared with April, rising to £8.3bn, though it remains nearly 39% lower than in February before the pandemic struck and the country was put into lockdown.

Construction’s increase in May was driven by new housing and repair and maintenance activity with the ONS suggesting more DIY took place during the weeks of lockdown.

Month-on-month both public and private housing increased by record amounts, with activity improving by 42.1% and 21.4% respectively.

Noble Francis, economics director at the Construction Products Association, said while housing had led construction's recovery it was still far below pre-coronavirus crisis.

In a tweet Francis said: "The housing and housing repair, maintenance and improvements sectors, which together account for 43% of the total construction industry and in May were all 50% lower than a year earlier or worse."

>> Housing output dropped 60% in April

Construction output fell by a record 29.8% in the three months to May, compared with the previous three-month period. This was driven by record falls of 30.3% in new work and 28.9% in repair and maintenance.

Private new housing and private commercial have fallen by 42.5% and 29.5% respectively during the period.

Clive Docwra, managing director of McBains, said the industry had a mountain to climb in the coming months.

He said: “Record decreases of more than 40% in new housing work and almost 30% in commercial work over the three months to May highlight how essential it is that the government does all it can to get construction moving again. It will take several months for the sector to truly recover.”

Overall GDP in May grew by 1.8% but the number has fallen 24.5% compared with February and in the three months to May has slumped by 19.1%.

..., which clearly highlights that the sharp rise in house building output in May 2020 compared with April 2020 was just a sharp rise in activity from a low base...#ukconstruction #ukhousing pic.twitter.com/oIPgTT5bGb

— Noble Francis (@NobleFrancis) July 14, 2020