Repairs drive September construction growth

Construction output rose slightly in September on the back of a strengthening market for repair and maintenance work.

The latest data from the Office for National Statistics shows monthly output increased by 0.4 per cent in volume terms in September, with a 2.1 per cent increase in repair and maintenance activity only partially offset by a 0.8 per cent decrease in new work.

The biggest area of growth was repair and maintenance in the private housing market, which grew by 3 per cent.

The boost in activity was enough to edge up output from July to September by 0.1 per cent, compared with the previous quarter.

The total for new orders in construction increased by 3.9 per cent (£393m) in the third quarter of the year, mainly due to non-housing public work, which rose by almost a quarter, and infrastructure, which was up by over 14 per cent.

Housing new orders saw an increase of 0.8 per cent, with the private and public housing sectors seeing increases of 0.9 per cent and 0.1 per cent respectively.

The annual rate of construction-output price growth was 3.9 per cent in the 12 months to September, which represents a slowing down from the record 10.4 per cent annual price growth seen in May 2022.

Fraser Johns, finance director at Beard Construction, said the fact that new work fell in September despite the quarterly increase in new orders showed how unpredictable and volatile the sector was in the current climate.

The importance of new infrastructure and non-housing public work – particularly schools and colleges – was reflected in Beard’s own order book, for which regional and national frameworks are a significant source of work and a driver in pipeline activity.

“The education sector remains a buoyant market for Beard, with starts on site across primary, secondary and further education in recent months,” he said.

“News of an increase in new housing orders will certainly be encouraging for those contractors reliant on the housing market, although the sector still faces real challenges in a sustained higher interest [rate] environment.”

The reliance on repair and maintenance work for September’s uplift showed that the appetite to commit to new building projects was clearly still dampened, Johns added.

“As a result, the message remains the same: we must remain open and transparent in our conversations with clients and stakeholders, all while doing what we can to minimise pressure on cost plans,” he said.

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