Construction bounces back strongly after slump

Latest News Tue, Jul 14, 2020 9:33 AM

The latest report from the Office for National Statistics shows that construction output grew by 8.2% in May following the record decline of 40.2% in April 2020.

The ONS figures show that construction output fell by a record 29.8% in the three months to May 2020, compared with the previous three-month period, with record falls of 30.3% in new work and 28.9% in repair and maintenance being the main issues facing the industry.

The decrease in new work (30.3%) in the three months to May was thanks to record falls in most of the new work sectors – private new housing and private commercial were the largest contributors, falling by 42.5% and 29.5% respectively.

The decrease in repair and maintenance (28.9%) in the three months to May was due to record falls in all repair and maintenance sectors – the largest contributor was private housing repair and maintenance, which fell by 39.8%.

However, in May there was monthly growth across all sectors, apart from public other new work and public housing repair and maintenance.

While new housing saw record monthly increases of 21.4% and 42.1% in private and public work respectively in May 2020, both have experienced a significant decline in output over recent months.

Private new housing fell 42.5% (£3,792 million) over three months, the biggest decline of any sector. From the anecdotal evidence received from contributors, housebuilders began to return to construction sites across the UK during May 2020, however, because of the social distancing measures these were not at full capacity. It was also highlighted that this was mainly to complete projects currently in progress rather than starting work on new projects.

Overall, the UK's economy rebounded more slowly than expected in May, growing just 1.8% from the previous month, as the gradual easing of lockdown had a modest impact.

Manufacturing and house building showed signs of recovery in May as some firms saw staff return to work.

But the Office for National Statistics said the economy was "in the doldrums".

As a result of big contractions in previous months, the UK economy is now 24.5% smaller than in was in February, the ONS added.

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