The finding from the Office for National Statistics which has been most widely quoted is that the UK economy shrank by 2.9% in January. However, for those focusing on the construction sector when reviewing the ONS data, the picture was considerably brighter, with construction output rising by 0.9% in January 2021.

Here at Advantage, we began the year by welcoming new members of the team and with busy ‘phones, as clients enquired about structural warranties, so we weren’t too surprised to read that the construction sector has remained resilient during turbulent times.

Today, we’ve been taking a quick look at the ONS statistics, which show that January’s rise in construction output follows a fall of 2.9% in December 2020. Overall, the level of output in January 2021 was 2.6% below the February 2020 level.

In addition, the level of new work was 6.4% below this level, while repair and maintenance work was 4.5% above this level despite a monthly fall.

New work increased by 1.7% in January 2021 and was accountable for an uplift in private commercial and infrastructure, which grew by 4.5% and 3.1%, respectively.

Repair and maintenance declined by 0.4% in January 2021, which was due to a 4.7% fall in private housing repair and maintenance.

This drop is despite growth of 5.0% in public housing and 1.3% in non-housing repair and maintenance.

Construction output grew by 1.7% in the three months to January 2021

Looking at the data on a quarterly basis, construction output grew by 1.7% in the three months to January 2021, compared with the previous three-month period.

This was due to growth in both new work, up 2.2%, and repair and maintenance rising by 0.8%.

Paul Fenner, head of construction at BDO, was quoted by Mortgage Introducer stating that:

“Construction output suffered a minor blip in December 2020, but the latest figures for January 2021 show that the sector’s recovery is back on track.

“The more positive figures reflect a growing confidence among construction firms that the worst is behind them.

“Indeed, BDO’s latest survey shows that 85% of construction firms are feeling positive about their prospects for the year ahead.

“However, risks remain and firms will need to keep a tight rein on costs and maintain strict financial discipline as we enter a very uncertain period.”

The green shoots of recovery are beginning to show

Fraser Johns, finance director at Beard, added:

“These latest figures, while positive for the future of the industry, suggest there is still a little nervousness in the market.

“The construction industry has already shown incredible resilience in the second half of 2020, and this 0.9% increase in output at the start of 2021 is welcome news.

“While we are clearly not out of the woods completely, the green shoots of recovery are beginning to show.

“It was only at the end of February that we received some clarity about the roadmap out of lockdown.

“Despite the construction industry remaining open throughout, some clients may have been hesitant to give the green light before they knew the timeline for a return to normal.

“The success of the vaccine rollout and the timeline now being in place should help confidence in the market grow in the coming weeks and months.

“As we enter spring, we expect demand to pick up quickly and bounce back as projects that have been on hold are given the go ahead.”

Do you require a structural warranty for your project? The AHCI team is proud to work with clients on developments throughout the UK, adhering to all social distancing guidelines to ensure that projects are covered by the appropriate structural warranty. To find out more, call: 0845 900 3969 or email: sales@ahci.co.uk