Month-to-month building output barely grew in March, growing by simply 0.2 per cent, based on the newest Workplace for Nationwide Statistics (ONS) figures.
Nevertheless, the slight progress nonetheless helped to ship £15.6bn of output – the very best month-to-month financial worth since data started in January 2010, the statistics organisation introduced on Friday (12 Might).
A 0.7 per cent enhance in new work in March was nearly cancelled out by a 0.6 per cent drop in restore and upkeep exercise.
And a equally blended image emerged from breaking down the statistics by business sector, with a 2.2 per cent month-to-month enhance within the worth of infrastructure work (£2.4bn) offset by a 1.4 per cent fall in personal housing exercise (nonetheless the biggest sector, at £3.2bn).
Kelly Boorman, associate and nationwide head of building at audit, tax and consulting-service supplier RSM UK, mentioned the gradual progress in March can be “exacerbated by yesterday’s [11 May] resolution by the Financial institution of England to lift rates of interest for the twelfth consecutive month”.
The financial institution elevated its base fee to 4.5 per cent. Coupled with the continued slowdown within the personal housing sector because the finish of 2022, this “means that headwinds stay”, Boorman added.
On a quarterly foundation, the ONS reported that building output grew by 0.7 per cent from January to March in contrast with October to December 2022.
The rise “got here solely from an increase in restore and upkeep (4.9 per cent), as new work noticed a lower of 1.9 per cent”, the ONS said.
New orders within the first quarter of this yr dropped by 12.4 per cent to £1.57bn in contrast with the ultimate three months of 2022. This was due primarily to decrease demand from the personal business and personal housing sectors, which fell by 22.3 per cent and 18.4 per cent respectively.
The ONS added that the annual fee of construction-output worth progress was 8.5 per cent within the 12 months to March 2023, marking a slowdown in inflation that peaked at 10.4 per cent in Might-June final yr. And Buying Managers’ Index information for April, launched final week, confirmed a 3rd consecutive month-to-month enhance in building exercise.
Nevertheless, business insiders stay watchful. “Price pressures and materials shortages appear to be stabilising, but it surely’s too early to say whether or not this represents a longer-term restoration, particularly given the ups and downs of the final three years,” warned Clive Docwra, managing director of property and building consultancy McBains.
He added: “That is mirrored by the first-quarter figures of 2023 exhibiting whole orders decreased by greater than 12 per cent in contrast with the ultimate quarter of 2022.”