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A wet spring dampens construction output in May

The torrential rain throughout May has been blamed for a fall in construction output as businesses lost working days.

Monthly construction output fell by 0.8% in May 2021 compared with April 2021, falling to £13,960 million, and this follows the 0.7% monthly decline in April 2021. Both of these declines in monthly growths come after an exceptionally strong growth in February and March 2021 (3.7% and 4.7%) respectively.

The fall occurred because of declines in both new work (0.4%) and repair and maintenance (1.5%), and this represents a drop of £115 million in monetary terms when compared with April 2021.

The level of construction output in May 2021 was 0.3% (£43 million) above the February 2020 pre-pandemic level; while new work was 3.5% (£320 million) below the February 2020 level, and repair and maintenance work was 7.5% (£363 million) above the February 2020 level.

The largest contributor to the monthly decline in May came from the private housing repair and maintenance, which decreased by 2.5% (£48 million).

Monthly all work index, chained volume measure, seasonally adjusted, Great Britain, January 2010 to May 2021

Infrastructure new work and private housing new work were the only two sectors that saw monthly growth in May 2021, of 2.3% (£49 million) and 1.4% (£41 million) respectively.

Under infrastructure, anecdotal evidence suggests the mixture of a strong pipeline of orders before the coronavirus (COVID-19) pandemic and being able to more easily implement social distancing measures on larger civil engineering sites has meant infrastructure has performed relatively strong over the pandemic period. For private new housing, anecdotal evidence suggests the stamp duty holiday continues to drive demand for housing activity in May 2021.

Overall, this second consecutive fall in construction could raise alarm as it may cause concern for what lies ahead. Though since May, the weather has improved, but warnings about the ongoing material shortage have been forecast, and the skills shortage could also impact output in the months to come.

 

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