This week, Advantage has been taking a look at the Office For National Statistics’ latest construction figures.
According to the ONS, monthly construction output grew by a record 23.5% in June 2020, substantially higher than the previous record monthly growth of 7.6% in May 2020.
Despite this strong monthly growth, construction output in June 2020 remains comparatively low at 24.8%, below the February 2020 level, which was before the full impact of the coronavirus (COVID-19) pandemic.
Looking slightly further ahead, Construction Europe Magazine (among others) highlighted July’s figures, which appear to point to a UK construction recovery.
They say: Construction activity for the top UK contractors returned to pre-coronavirus levels during July, according to industry analyst Barbour ABI.
The company released its monthly table on 11th August, showing the 50 leading contractors were awarded a total of 165 projects, with a combined value of over £3.9 billion.
This monthly figure compares favourably with the monthly average in 2019 of £3.2 billion, and equals the monthly average between January and March this year.
Tom Hall, chief economist at Barbour ABI & AMA Research, said that, while awards for the leading UK contractors had recovered strongly in July, it was worth noting that:
“There was likely to be a bow wave of projects now being green-lighted after lockdown and furlough.”
He added that:
“Given the uncertainty over the recovery in the wider economy, the future planning pipeline is also currently uncertain.”
Looking at the ONS and Barbour ABI’s figures, we can, of course, see a much more positive picture emerging than we were seeing in spring. However, as highlighted by Tom Hall, the early signs of a recovery for the construction industry are accompanied by greater uncertainty for the economy as a whole.
At present, construction is said to be one of the key sectors helping to drive the UK’s economic recovery, and as one of the first sectors to re-open, it appears to be returning to pre-Covid-19 levels faster than other parts of the economy.
Overall, we anticipate that projections for growth in UK construction output will remain conservative until other sectors begin to stabilise.