Construction Output: Commercial activity boosts industry’s pipeline of new orders in Q1 2024
10 May 2024
Monthly construction output decreased slightly by 0.4% in March 2024, coming from decreases in new work (0.7%) and repair and maintenance (0.1%). In Q1 2024, construction output fell by 0.9%, which came solely from a 1.8% decrease in new work, as repair and maintenance increased by 0.3%.
Infrastructure new work and non-housing repair and maintenance were the main sector contributors to the monthly decrease, falling 3.6% and 2.4%.
However, total construction new orders increased 15.9% (£1,436m) in Q1 2024 compared to Q4 2023, with the quarterly increase driven by private commercial new work and public other new work, which increased 27.9% (£700m) and 43.8% (£536m) respectively.
Commenting on the construction output data Kelly Boorman, partner and national head of construction at RSM UK, said: 'Despite the slight monthly fall in March, the construction industry remains confident in its pipeline due to the significant uptick in construction new orders in Q1 2024, which reflects sentiment in the market that activity is growing and pipeline recovery is strong.
'The quarterly uplift was driven largely by a sharp increase to private commercial new work, which shows that companies are setting in motion their plans for flexible, hybrid and sustainable workplaces. However, the sharp increase in commercial means that construction businesses will need to continue to manage their pipelines and margins carefully, in order to ensure growth and prevent a shortage in the supply chain.
'However, infrastructure was a main sector contributor to the fall in monthly output, with further quarterly and yearly falls. This suggests there are still some mobilisation issues and caution amongst businesses due to market and political instability, especially with a general election looming – making it difficult to plan ahead. But, in Q2 2024, we have seen some previously stalled infrastructure projects finally coming to fruition. In addition, pension funds have outlined their planned investment into UK infrastructure projects in the next 12 months, which will support strong pipelines and improved margins for long-term recovery and growth.'
Infrastructure new work and non-housing repair and maintenance were the main sector contributors to the monthly decrease, falling 3.6% and 2.4%.
However, total construction new orders increased 15.9% (£1,436m) in Q1 2024 compared to Q4 2023, with the quarterly increase driven by private commercial new work and public other new work, which increased 27.9% (£700m) and 43.8% (£536m) respectively.
Commenting on the construction output data Kelly Boorman, partner and national head of construction at RSM UK, said: 'Despite the slight monthly fall in March, the construction industry remains confident in its pipeline due to the significant uptick in construction new orders in Q1 2024, which reflects sentiment in the market that activity is growing and pipeline recovery is strong.
'The quarterly uplift was driven largely by a sharp increase to private commercial new work, which shows that companies are setting in motion their plans for flexible, hybrid and sustainable workplaces. However, the sharp increase in commercial means that construction businesses will need to continue to manage their pipelines and margins carefully, in order to ensure growth and prevent a shortage in the supply chain.
'However, infrastructure was a main sector contributor to the fall in monthly output, with further quarterly and yearly falls. This suggests there are still some mobilisation issues and caution amongst businesses due to market and political instability, especially with a general election looming – making it difficult to plan ahead. But, in Q2 2024, we have seen some previously stalled infrastructure projects finally coming to fruition. In addition, pension funds have outlined their planned investment into UK infrastructure projects in the next 12 months, which will support strong pipelines and improved margins for long-term recovery and growth.'
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