CIOB responds to today's construction output figures from the ONS

The Chartered Institute of Building (CIOB) has responded to today’s construction output figures published by the Office for National Statistics (ONS).

UK GDP grew by 0.4% in October, the sixth consecutive monthly increase. However, it remains significantly lower than the level of growth seen earlier this year, with 7.9% growth in February. This may be partly due to the national restrictions introduced in response to the coronavirus pandemic.

Since the initial lockdown in March, the construction industry, like other sectors, has had to find new ways of working and adapt their practices. Construction industry output fell by 44.4% between February and April 2020. From April to October, the industry grew by 68.4% but the sector remains smaller that it was pre-pandemic. June was a strong month for many sectors, as lockdown restrictions were eased, but since July there has been a loss in momentum and recovery has been weak.

In October, construction GDP grew by 1% and saw a divergence between new work activity and repair and maintenance.

The latest increase was driven by public “other new work” (7.5%) and non-housing repair and maintenance (5.1%). However, both remain below pre-pandemic figures, with new work 8.2% below and repair and maintenance 3.1% below what was seen in February. Despite growth in these two areas, private new housing, which fell by 1.9%, acted as a drag on growth in October.

The ONS has also released survey data that showed construction industry respondents had a lower proportion of their workforce on partial or furlough leave than the average for all industries. In the October to November period, construction industry respondents had 2.3% of their workforce on partial or furlough leave, compared with the 9% average for all industries.

The CIOB anticipates that quarter 4 will grow at a slower pace, with any increase likely due to more firms taking advantage of government schemes helping to boost new projects and retain jobs, in addition to existing projects which were delayed due to the pandemic. However, the drag will be down to national and local lockdown restrictions and the continuing uncertainty surrounding Brexit.

Caroline Gumble, Chief Executive at the CIOB, said:

Throughout this year, I have been consistently impressed with how resilient the construction industry has been in these uncertain times, although it does look like early 2021 will be challenging. Construction is a key driver of the economy and will bounce back. However, in order to ensure the industry is supported and can play its role in the economic recovery, the CIOB would like to see the Government make a national retrofit plan an infrastructure priority and a core element of the Industrial Strategy. This will provide a clear direction of travel for the construction industry and the certainty the private sector needs to invest in improving the energy efficiency of our built environment.

Further reading: Construction output in Great Britain for October 2020