In May, construction output experienced a slight decrease of 0.6% compared to April. While this dip raises some concerns, a closer look reveals that growth in new work saw a marginal increase of 0.06%. However, repair and maintenance (R&M) activities declined by 2.1%, impacting the overall figures.
According to the Office for National Statistics, the most significant monthly changes were observed in infrastructure new work, which increased by 3%, and public new housing, which rose by 2.4%. These gains indicate sustained investment in key public sectors, providing some optimism amidst the broader slowdown.
On an annual basis, total construction output showed a positive trend, growing by 1.2%. New work was up by 3.6%, driven by several large-scale projects across the country. However, R&M saw a decrease of 1.7%, suggesting a shift in focus towards new developments rather than maintenance activities.
Dr. David Crosthwaite, chief economist at BCIS, commented, “Following promising signs of growth in April, these latest figures are a bit of a setback. The decline in repair and maintenance, which has been a significant growth driver in recent years, is particularly notable. Additionally, the drop in both public and private new housing output for the month could concern the government, especially given its ambitious housebuilding targets.”
For 2024, the largest increases in new work were in private industrial projects, which rose by 17.4%, and public non-housing projects, including health and education, which increased by 16.2%. This surge highlights the ongoing investment in industrial infrastructure and essential public services.
In the same year, R&M saw a 5.1% rise in public housing output, while private housing decreased by 8.5%. This divergence suggests a strategic focus on maintaining public housing stock, even as private housing investments decline.
