ONS data says output declined 2% April following housing falls

Construction output declined in April but remained above pandemic levels for the second straight month, the latest Office for National Statistics figures have revealed.

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.

But a 2% contraction in April saw this gap close to just 0.3%.

According to the ONS figures, output in April fell because of a 2.9% decline in new work and a 0.6% reverse in repair and maintenance activity.

Figure 2_ All new work sectors except infrastructure had lower output in April 2021 than in February 2020 before the pandemic

The three largest contributors to the fall in monthly growth, private new housing, private commercial and private housing repair and maintenance, were all coming off strong growth in March.

Private housing led the way, falling by 11.1%, or £352m. This was followed by private housing repair and maintenance and private commercial new work, which recorded falls of 7.1%, £144m, and 6.2%, £134m, respectively.

Mark Robinson, group chief executive at Scape, said April’s decline was a reminder the industry must be wary of the threat posed by ongoing materials shortages.

He said: “Material shortages have been well-negotiated to date, helping the UK economy to accelerate growth as we head into the sector’s peak months.

“However, the additional impact of rising material costs has the potential to delay or even, unless resolved quickly, stop new projects getting off the ground in the second half of the year.”

Figure 3_ All repair and maintenance sectors except public housing had higher output in April 2021 than in February 2020 before the pandemic

Clive Docwra, managing director of McBains, said the government should be concerned by which sectors had driven the contraction.

He said: “Private new housing work was the largest contributor to this fall, which will pose a risk to the government’s housebuilding targets.”

But construction output grew by 5.1% in the three months to April 2021 compared with the previous quarter, because of a 5.2% increase in new work and 4.9% increase in repair and maintenance.

The increase in new work in the three months to April was because of growth in all new work sectors apart from private industrial, which fell by 3.6%. The largest contributor to this growth was private commercial new work, which ticked up by 7.4%.

The increase in repair and maintenance activity was because of growth in non-housing and private housing repair and maintenance, which grew by 6.2% and 6.6% respectively.

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