Fresh figures released today point to possible headwinds for the construction sector, with the industry preparing for a challenging Autumn Budget.The latest ONS data showed construction output edged up by 0.3% in June, clawing back some of May’s 0.5% decline. This growth was entirely driven by a 1.2% rise in repair and maintenance activity, as new work dipped 0.4%. Reports Contract Journal
Over the April-to-June period, new work increased by 1.1% while repair and maintenance saw a 1.4% lift compared to the previous quarter.
Private housing repair and maintenance led the gains, surging 3.7% in June, while non-housing repair and maintenance posted a smaller 0.8% rise.
But the outlook is less encouraging. New orders fell sharply in Q2, down 8.3% (£976m), dragged lower by reduced demand in both infrastructure and private commercial sectors.
Scott Motley, head of programme, project and cost management at AECOM, said: “An uplift in June’s output offers some relief after last month’s dip, though underlying conditions remain challenging.
“This improvement underlines how important it will be for the sector to hold onto any gains in the face of ongoing market pressures.”
He added: “The sharp fall in July’s Construction PMI to its lowest reading since May 2020 is a clear warning sign. It suggests that the outlook for the rest of the summer is more uncertain, particularly for privately financed projects.
“The Bank of England’s decision to cut interest rates to 4% in early August may offer some relief for borrowing costs and help revive sentiment in housing and commercial markets, but it will take time for any benefits to feed through to activity on the ground.
“Maintaining this recovery will require both the continued stability of public-sector investment and a gradual strengthening of confidence in private-sector demand.”
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