Construction output slumps during rainy July

Construction output fell by 0.5% in July as wet weather led to delays in projects, according to official figures.

Heavy rainfall and lower than average temperatures in the month led to a slowdown in planned work following a 1.6% output increase in June, the Office for National Statistics said.

The decrease in monthly output came solely from a 1.3% fall in repair and maintenance, with new work increasing by 0.1% in July.

At the sector level, five out of the nine surveyed sectors saw a decrease in the month, with the main contributors being private housing repair and maintenance and new private housing work, which fell by 3.9% and 2.2% respectively.

The slump was worsened by a continued slowdown in the housing sector due to high interest rates.

But private commercial work fared relatively well with a jump of 4.2%, while infrastructure saw a small increase of 0.8%.

McBains managing director Clive Docwra said the construction sector will “feel like it’s back to square one”.

“A significant factor is high mortgage rates denting demand for new homes, reflected by the continued sluggish performance in volume housebuilding,” he added.

“My guess is that we could see more private housebuilders forging closer partnerships with local authorities and housing associations to pursue mixed tenure models such as social housing and shared ownership, which are less impacted by volatility in the wider property market. 

“Our clients also tell us that even though building material prices are falling, this is taking time to feed through the supply chain, putting a further squeeze on delivery.” 

The figures were part of a wider ONS assessment showing the entire UK economy shrank by 0.5% in July, driven by strike action from NHS workers and teachers.