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Further decline in construction output highlights “loss of momentum”

Construction output falls for fifth consecutive month

As the industry battles the ongoing supply chain issue and labour shortages, monthly construction output fell 0.2% in volume terms in August 2021, now with the level of output 1.5% below its pre-coronavirus pandemic February 2020 level. New work remained flat this month (0.0%) with repair and maintenance falling (0.6%) on the month.

Anecdotal evidence received from the Monthly Business Survey for Construction and Allied Trades survey 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, was a contributing factor to the monthly fall, which has been an ongoing problem voiced by survey participants.

The latest building materials and components release (6 October) from the Department for Business, Energy and Industrial Strategy (BEIS), delves further into the monthly increase in building material costs in August 2021. Building materials for all work in August 2021 increased by 2.8% compared with July 2021 and 23.5% compared with August 2020. Specific construction materials with the greatest annual price increase in August 2021 compared with August 2020 were imported plywood (78.4%), fabricated structural steel (74.8%), and imported sawn or planed wood (74.0%).

Latest UK Landscape Barometer data (focused on the trading month of August) revealed that enquiries for design and build companies decreased by -13% on average. Participants expressed their concern for what could be to come in the future. (For more information look out for our next issue of Pro Landscaper, available on our website here later this month).

Mark Robinson, group chief executive at procurement body SCAPE, said: “A decline in output highlights a telling loss of momentum across the construction industry, as energy costs, labour shortages and fast-rising material prices continue to paint a concerning picture heading into winter.

“With attention turning to this month’s Budget and Spending Review, the industry will be considering how best to mitigate these challenges when it is handed the baton to deliver more of the community-focused regeneration needed to deliver on the government’s ‘Levelling-Up’ ambitions.”

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