Construction output continues to decline

According to recent data from the Insolvency Service, the UK construction industry has recorded the highest number of insolvencies across all sectors in the 12 months leading up to March 2023.

Data suggests that the industry’s post-Covid recovery now looks to be over.

The Office for National Statistics (ONS) has reported that in August 2021 construction output in England had fallen for the fifth month in a row.

Graphs compiled by the ONS show a near-vertical decline with the arrival of Covid-19 virus in the UK in early 2020 and the subsequent national lockdown in spring. Then from May 2020 to April 2021 there was an almost equally dramatic rise to return to near ‘normal’ levels of output.

However, since April this year, there has been a steady decline in construction output.

The ONS said in a bulletin that anecdotal evidence from businesses continued to suggest that product shortages caused by supply chain issues and subsequent price rises were the main reasons for the decline.

The rising prices of raw materials such as steel, concrete, timber and glass, along with the difficulty in sourcing these materials for jobs was a contributing factor to the monthly fall, says the ONS.

Monthly construction output fell 0.2% in volume terms in August 2021 compared with July 2021, to £14,243 million, and follows the upwardly revised (by 0.6 percentage points) 1.0% monthly decline in July 2021.

Many contractors have stated that their order books were healthy however, availability of products was impacting on construction projects currently underway.