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Construction output grows despite supply chain problem

Monthly construction output grew 1.3% in volume terms in September 2021, compared with August 2021. This is the first monthly increase since June 2021 and the largest since March 2021, when output increased by 4.8%. New work and repair and maintenance both grew on the month, increasing by 1.3% and 1.2% respectively.

Despite the monthly growth, declines in both July 2021 (1.2%) and August 2021 (0.7%), saw quarterly construction growth fall 1.5% in Quarter 3 (July to Sept) 2021, compared with Quarter 2 (Apr to June) 2021. This is the first quarterly fall since Quarter 2 2020, after four successive increases in quarterly growth.

Across Quarter 3 2021, anecdotal evidence received from survey returns to the Monthly Business Survey for Construction and allied trades suggested that the rising prices of raw materials such as steel, concrete, timber and glass, along with the difficulty in sourcing these materials for jobs contributed to the overall fall in the quarter.

In addition, anecdotal evidence also suggested supply chain issues were a factor with many contributors, stating that while order books were healthy, the availability of certain construction products was affecting projects currently underway.

Price inflation was strongest in new housing (7.5%) and private industrial new work (6.3%).

New work and repair and maintenance both contributed to the monthly increase in the level of all work in September 2021:

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