Construction output rebounds with 8.2% increase
The UK construction sector continued its tentative post-lockdown recovery with an 8.2% rise in output during May 2020 after the record decline of 40.2% in April.
The level of construction output is now down 38.8% on February 2020 before the impact of the coronavirus pandemic.
May’s construction bounce is more than four times better than the growth seen in the wider economy. Private sector housebuilding increased by over a fifth and public sector residential construction surged by 42%.
Construction output fell by a record 29.8% in the three months to May 2020, compared with the previous three-month period, driven by record falls of 30.3% in new work and 28.9% in repair and maintenance.
The decrease in new work (30.3%) in the three months to May 2020 was because of record falls in most of the new work sectors; private new housing and private commercial were the largest contributors, falling by 42.5% and 29.5% respectively.
The decrease in repair and maintenance (28.9%) in the three months to May 2020 was because of record falls in all repair and maintenance sectors; the largest contributor was private housing repair and maintenance, which fell by 39.8%.
Today’s figures follow last week’s update of the headline seasonally adjusted IHS Markit/CIPS UK Construction Total Activity Index, which jumped to 55.3 in June, from 28.9 in May, the steepest pace of expansion since July 2018.
Clive Docwra, managing director of construction consulting and design agency McBains, said: “After two successive months of record falls in output, the construction sector was bracing itself for more bad news – and today’s figures reflect just how much of a historic downturn the industry is experiencing.
“In particular, 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.
“Although May saw a rebound as construction started to return to work, this is all relative, with output 38.8% lower compared with February before the pandemic hit. It will take several months for the sector to truly recover.”
Gareth Belsham, director of the national property consultancy and surveyors Naismiths, added: “Even by the construction industry’s volatile standards, this is white knuckle stuff.
“April’s gravity-defying 40% plunge in monthly output was twice as bad as the contraction suffered by the economy as a whole. Yet May’s 8.2% surge in construction is more than four times better than the growth seen in the wider economy.
“Impressive though the jump in growth is, output is still a shadow of its pre-Covid level and even though building sites have finally reopened across the UK, productivity is likely to be hampered by social distancing restrictions for months to come.
“Nevertheless this is the start of the industry’s fightback. May saw records smashed across the board for the pace of month-on-month growth.
“Private sector housebuilding surged by over a fifth, and public sector residential construction leapt by a scarcely credible 42.1%.
“Nevertheless these are still very early days. While the absolute worst may be past, the industry is still braced for the whiplash effect of what may be a long and painful recession.
“Fragile business confidence and weak levels of investment will continue to constrain demand for many months, and the road to recovery will be long and hard. But at least it starts here.”