Construction Output: Future of construction sector is bright, but tailwinds remain, says RSM
14 January 2022
Latest numbers from the Office for National Statistics (ONS) show that Construction output increased by 3.5 per cent in November 2021 – the largest monthly increase seen since March 2021, with volume at £14,676 million – the highest level of output since September 2019 and 1.3% above pre-pandemic levels in February 2020.
The monthly construction output increase came solely from an increase in new work of 5.7%, with maintenance seeing a slight decline of 0.2% for the month. The recovery to date, since the start of the pandemic, is mixed with infrastructure above at 49.3% and private commercial 28% below their respective February 2020 levels in November 2021.
Commenting on construction output data for November 2021, Kelly Boorman, partner and construction industry analyst at RSM, said:
‘The November construction outputs, along with the momentum on the ground to get projects previously delayed started suggest the construction sector is now on an upward trend back to pre-pandemic levels, with an ever-increasing pipeline of large infrastructure projects, repair and maintenance activity, and private residential demands remaining strong.
‘While labour availability and pricing remain the largest challenge for the construction sector, material price growth has slowed. With supply chain pressures easing coupled with an acceptance that costs are not going to be going down in the near future, there has been a push to get projects started to prevent further increases in labour and material prices being absorbed.
‘The future looks bright for the construction sector with many businesses reporting the largest pipelines they have seen for many years, but a tailwind remains with labour resource and pricing unlikely to ease in the short term and repayment of CBILS and government support schemes looming.’
