Dark clouds remain but latest ONS figures reveal industry output has hit 18 month high

A boom in repair and maintenance work helped finally push construction activity past pre-covid levels, the latest figures from the Office for National Statistics have said.

Construction output in March this year was 2.4% above the February 2020 level – the month widely considered to be the last one unaffected by the pandemic with the first lockdown being imposed on 23 March last year.

london cranes

Source: Shutterstock

Tower cranes dominate the skyline in London's Nine Elms. Output levels are now back up to pre-pandemic numbers but the materials shortages crisis threatens to put the brakes on the sector's ongoing recovery

Overall construction output in March grew by close to 6% and was close to £14.3bn – the highest since September 2019 when it was £14.4bn.

But amidst all the good news, several pointed to the ongoing materials shortages as an issue that could put the brakes on construction’s continued recovery from the height of the first lockdown when output collapsed 44% last April.

Clive Docwra, managing director of consultant McBains, said: “While new contracts continue to come in, construction firms are being squeezed by soaring prices of imported materials, notably concrete, steel and timber.”

And Fraser Johns, the finance director at regional contractor Beard, added: “As an industry we have to find ways to work around and plan ahead with supply chains to mitigate any serious delays, otherwise we’re in real danger of undermining our comeback from ground zero a year ago.”

Repair and maintenance work is now 7.7%, or £377m, above the February 2020 level while the latest figures show that new work had just about regained parity, finishing £44m below last February’s number, the equivalent of a 0.5% fall.

In terms of repair and maintenance, private housing was the main driver with activity levels hiking this sector 16.1% above pre-pandemic levels.

New work levels saw some sectors out-perform others, with infrastructure activity coming in 9.2% above February 2020 levels, although private industrial was still 27% below pre-covid output.

Main growth sectors in March were private new housing, up 9%, and private commercial, which saw output grow by nearly 7%.

New orders also jumped by 12% in the first three months of the year compared to the previous quarter. But they remained 13.3% lower than the first quarter of last year.