ONS says materials shortages appear to be easing

Construction output for both private and public housing showed strong monthly growth in December, according to the Office for National Statistics.

Offiical figures published today show a 7.4% increase in activity in new public housing month-on-month and a 3.1% increase in new private housing. Repairs and maintenance output however dipped 0.7% month on month.

Monthly Private housing output is now 0.3% up on pre-pandemic levels, although new public housing remains 26% lower despite December’s strong monthly increase (see table below).

ONS said anecdotal evidence from surveys of construction businesses “suggested some of the issues in sourcing construction products over recent months had continued to ease.”

The growth in new housing output pushed overall monthly construction output growth in December to 2%, back to its pre-pandemic level for the first time, said ONS.

The ONS previously said pre-pandemic output had been surpassed in April and November last year ,however this is now not the case after late data suggested the bounce back was not quite as strong in those months as initially thought.

Type of work (%)£m
Total all work 0.3 35
  Total all new work -2 -190
  Total repair and maintenance 4.5 225
New housing    
  Public -26 -152
  Private 0.3 11
Other new work    
  Infrastructure 44.7 837
  Public -17.2 -155
  Private industrial -1.2 -6
  Private commercial -29.1 -725
Repair and maintenance    
  Public housing -14 -99
  Private housing 13 228
  Non-housing 3.9 97

However market information provider Glenigan earlier this week warned that cost pressures appeared to be forcing developers to scale back or cancel projects.

Mark Robinson, group chief executive of public sector procurement body Scape, said that while the construction industry “overcame the odds” in December, sustained inflation furthered by soaring energy costs post a threat to growth this year.

He said: “Mitigating the impact of these inflationary pressures will require extensive, ongoing dialogue and collaboration between clients, contractors and their supply chains – qualities that frameworks aspiring to the ‘gold standard’ must embed.

“Crucially, it’s important that payments are prompt and that any increased cost burden continues to be shared, rather than passed on to the supply chain. These firms are most vulnerable to cashflow challenges, but critical to the delivery of projects.”

 

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