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Construction falls for first time since the summer

By - World Infrastructure Journal

The Office for National Statistics (ONS) has revealed that UK construction output in December 2020 was down 2.9 per cent from November, falling to £13,516 million, its lowest level since August.

This comes after a period of growth for the construction industry which had been recovering every month since its 41 per cent fall in April last year. This was in large part due to Covid-19 restrictions.

Falls in new and maintenance work led to December's drop with construction industry output still 3.5 per cent below pre-covid levels.

Despite this, quarterly construction output for Q4 2020 still managed to grow by 4.6 per cent compared to the third quarter. New orders had a record quarterly growth of 71.8 per cent in Q3 which expectedly led to a fall by 8.8 per cent in the latest quarter.

The ONS also made observations comparing the construction industry’s recovery from the current pandemic to its recovery after the 2008/09 global economic crash. Although 2020 witnessed a sudden peak-to-trough fall in output, “it is noticeable how much quicker the industry has recovered than after the 2008 to 2009 recession,” the ONS said.

This peak is attributed to the sudden closure and then reopening of sites last spring, which took three quarters to recover above its pre-coronavirus level. In comparison, post-financial crisis 2008 to 2009, new work took 29 quarters to reach its pre-recession level of output.

Gareth Belsham, director of surveyors Naismiths, commented: “Economic gravity has finally caught up with the UK’s construction sector, which at times last year appeared to be in a boom while other industries were in a bust. December’s fall in output is a drop in the ocean compared to the eyewatering 40% contraction suffered last April. Nevertheless the slowdown matters because it has undone some of the great progress made over the summer and autumn".


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