Wet weather puts brakes on construction recovery

Construction output fell by 0.9% in the first quarter of 2024, according to data from the Office for National Statistics (ONS).

The quarterly drop came solely from a decrease in new work (1.8% fall), as repair and maintenance increased by 0.3%.

The same level of fall, 0.9%, was also seen in Quarter 4 of 2023.

Monthly construction output is estimated to have decreased 0.4% in volume terms in March this year - this came from decreases in both new work (0.7% fall) and repair and maintenance (0.1% fall). 

At the sector level, five out of the nine sectors saw a fall in March, with the main contributors to the monthly decrease seen in infrastructure new work, and non-housing repair and maintenance, which decreased 3.6% and 2.4%, respectively.

Quarter 1 saw falls in both February and March , with the only rise in January thisy year. 

Anecdotal evidence received from returns for the Monthly Business Survey for Construction and Allied Trades (MBS) suggested mixed effects of wet weather decreasing output, but improvement across some sectors within construction because of warmer weather. 

Adverse weather in February and March, including heavy rainfall, decreased output and delayed work.

Total construction new orders increased 15.9% (£1,436m) in Quarter 1 2024 compared with Quarter 4 2023.

This quarterly increase came mainly from private commercial new work and public other new work, which increased 27.9% (£700m) and 43.8% (£536m), respectively.

The annual rate of construction output price growth was 1.5% in the 12 months to March 2024

This has slowed from the record annual price growth in May 2022 and June 2022 (10.7%).

Scott Motley, head of programme, project and cost management at AECOM, said: “A downturn in output puts paid to talk of a recovery for now as the sector continues to endure challenging economic conditions. 

“Indeed, we expect the pipeline of new work to reduce in the second half of 2024, especially while interest rates remain high and the impending general election gives rise to a pause in infrastructure investment decisions.

“As such, order books are most likely to be filled by short term repair and maintenance work as firms continue to adopt a precautionary two-stage approach to major tenders to avoid overstretching themselves in a competitive market.”

Click here to read the latest ONS data.