Construction output slows driven by a decline in new homes
Construction output in the UK grew 4% year-on-year in November of 2022, the smallest increase since June, following a downwardly revised 5.9% gain in October. Softer increases were seen in construction of new housing (8.0% vs 18.5% in October), new work (3.0% vs 6.0%) and repair and maintenance (5.5% vs 5.6%). Compared to the previous month, construction output showed no growth, after a downwardly revised 0.4% rise in October.
CEO of Alliance Fund, Iain Crawford, commented: “A softening in construction output during November was always likely following what is traditionally a stronger summer period, but particularly with the addition of growing uncertainty surrounding the wider property market.
“With both the construction of new housing and new work seeing a reduction in output, it appears as though the sector may have paused for thought more prematurely than usual, in order to fully consider the implications of the wider economic backdrop and how best to negotiate them in 2023.
“This trend is likely to remain until the sector shifts fully through the gears this year but we don’t foresee any notable long-term decline in construction output in 2023.”