Construction output in Great Britain: February 2021

• Construction output grew by 1.6% in the month-on-month all work series in February 2021, because of a 1.5% increase in new work and 1.9% increase in repair and maintenance; this was the highest monthly growth in all work since September 2020 when it grew by 1.8%.

• The level of construction output in February 2021 was 4.3% below the February 2020 level; while new work was 7.8% below the February 2020 level, repair and maintenance work was 2.2% above the February 2020 level.

• The monthly increase in new work (1.5%) in February 2021 was because of growth in all new work sectors apart from infrastructure, which fell by 3.4%; the largest contributor to this growth was private commercial new work, which grew by 4.0%.

• The monthly increase in repair and maintenance (1.9%) in February 2021 was because of growth in private and non-housing repair and maintenance, which grew by 4.7% and 2.6% respectively, offsetting the 8.6% fall in public housing repair and maintenance.

• Construction output fell by 1.0% in the three months to February 2021 compared with the previous three-month period, because of a 1.6% fall in new work and 0.1% fall in repair and maintenance.

• Following revisions in this release, 2020 annual construction growth has been revised down 1.5 percentage points to an annual decline of 14.0%; this is now the largest decline in annual growth since annual records began in 1997.

• The Output in the construction industry: sub-national and sub-sector dataset was temporarily suspended following the outbreak of the coronavirus (COVID-19). The Office for National Statistics (ONS) plans to resume publication of this dataset in the next release on 12 May 2021. Please see the Measuring the data section for more information.

Monthly construction output grew by 1.6% in February 2021 compared with January 2021, rising to £13,319 million, and is the highest month-on-month growth since September 2020 when output grew by 1.8%. This return to growth follows flat growth (0.0%) in January 2021, which has been revised down 0.9 percentage points from its first estimate.

Despite this growth, the level of output in February 2021 was 4.3% (£598 million) below its February 2020 pre-pandemic level.

Table 1 shows the change in output for the types of construction work between February 2020 and February 2021. All work construction output in February 2021 was below its pre-coronavirus level, at 4.3% below February 2020. The recovery to date from the initial fall has been driven by repair and maintenance output, which is 2.2% above its pre-pandemic February 2020 level in comparison with new work, which is 7.8% below February 2020. Infrastructure is the only new work component to have recovered above its pre-pandemic level in February 2021.

Contributions to growth

Construction output can be broken down by different types of work. These are categorised into all new work, and repair and maintenance, as shown in Figure 2. All new work accounts for approximately two-thirds of all work, while repair and maintenance accounts for approximately one-third of all work.

The monthly growth in all work construction output in February 2021 was driven by both new work, and repair and maintenance. This was the first time since September 2020 where both new work, and repair and maintenance saw monthly growth in the same month. While the level of repair and maintenance was 2.2% above its February 2020 pre-pandemic level in February 2021, new work output was 7.8% below its level.

Construction output grew by 1.6% (£213 million) in February 2021 compared with January 2021 because of monthly growth in all sectors, except infrastructure and public housing repair and maintenance.

This was the highest monthly growth in all work since September 2020 when it grew by 1.8% (£230 million).

New work grew by 1.5% (£123 million) in February 2021 compared with January 2021, because of increases in all new work sectors, except infrastructure, which fell by 3.4% (£66 million). The largest contributors to the monthly increase in new work were private commercial work, which grew by 4.0% (£75 million) and public new housing, which grew by 13.5% (£51 million), both of which were the highest monthly growths since July 2020. Despite the monthly increases both sectors are still considerably below their pre-pandemic levels as shown in Figure 4.

Figure 4 shows the level of construction output in new work sectors since February 2020. Infrastructure output was the first to recover above its pre-pandemic February 2020 level in August 2020 and was the only sector to be above this level in February 2021.

Repair and maintenance output grew by 1.9% (£91 million) in February 2021 because of increases in both private and non-housing repair and maintenance, which grew 4.7% (£83 million) and 2.6% (£64 million) respectively.

Public housing repair and maintenance fell 8.6% (£57 million) in February 2021, which was the largest month-on-month decline in the series since April 2020 when it fell 51.4% (£350 million). While public housing repair and maintenance is a comparatively smaller and more volatile series, the fall in February 2021 is the third largest decline in the series since monthly records began in 2010, as shown in Figure 5.

Private housing and non-housing repair and maintenance recovered above their February 2020 pre-pandemic level in August 2020 and have stayed above since. Whereas, public housing repair and maintenance has now been revised to below its pre-pandemic February 2020 level as part of the GDP quarterly national accounts, UK: October to December 2020 release, published on 31 March 2021. The 8.6% monthly fall in February 2021 meant public housing repair and maintenance was 12.0% (£82 million) below its pre-pandemic level as shown in Figure 6.

Figure 7 shows how the fortnightly construction net balance turnover estimates from the Business Insights and Conditions Survey (BICS) broadly reflect the published construction output all work estimates. Both suggest broadly flat growth in construction output from August 2020 to February 2021.

Figure 7: Fortnightly turnover estimates derived from BICS data broadly reflect the monthly construction output estimates since August 2020

Construction net turnover balances of businesses currently trading against all work construction output monthly estimates, UK, 1 February 2020 to 7 March 2021

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Notes

1. Construction output estimates are for Great Britain, whereas Business Insights and Conditions Survey (BICS) estimates are for the UK construction sector, with other notable differences including sample size and response rates to the surveys.
2. Final unweighted results, Wave 1 to Wave 6, and final weighted results, Wave 7 to Wave 25, of the Office for National Statistics (ONS) Business Insights and Conditions Survey (BICS).
3. Weighted net balances have been calculated from Wave 7 onwards only. The sample redesign in Wave 7 improves our coverage for the small sized businesses, allowing for weighted results to be truly reflective of all businesses.
4. Net turnover balance is given by subtracting the percentage of businesses reporting a decrease in turnover, from the percentage of businesses who reported an increase in turnover, then scaled up using a scaling factor for visual purposes. GDP and BICS estimates use different scales (one is an index, the other percentage points). Hence, to align them onto the same graph, we apply a scaling factor to BICS net balances so users can easily compare these two related trends.

Construction output fell by 1.0% (£407 million) in the three months to February 2021 compared with the previous three-month period because of declines across most sectors as shown in Figure 8. This is the first decline in all work in the three-month on three-month series since July 2020 when it fell 8.6% (£3,034 million)

New work fell by 1.6% (£396 million) in the three months to February 2021, with private commercial new work the largest negative driver falling by 5.3% (£320 million). Despite successive monthly increases in private commercial new work at the start of 2021, this was the third consecutive decline in the three-month on three-month series in February 2021. Private commercial new work has seen a general downward trend since 2017 as shown in Figure 9 and was 28.4% below the February 2017 peak level of output in February 2021.

In comparison, infrastructure new work was the largest positive contributor to all work in the three-month on three-month series in February 2021 growing by 4.7% (£257 million). Figure 9 shows the level of infrastructure work remains relatively high in the three months to February 2021 despite the monthly fall in February 2021.

Repair and maintenance fell by 0.1% (£12 million) in the three months to February 2021, the largest contributor to which was a 4.6% (£92 million) fall in public housing repair and maintenance. Non-housing repair and maintenance was the only repair and maintenance sector to see growth in the three-month on three-month series in February 2021, increasing by 1.5% (£108 million).

This is the first monthly release to incorporate the revisions made in the GDP quarterly national accounts, UK: October to December 2020 release, published 31 March 2021. As a result, revisions have been made back to January 2020.

Latest annual, all work, construction output growth has been revised down 1.5 percentage points from an annual fall of 12.5% in 2020 to an annual fall of 14.0%. This is now a record annual fall in construction output growth since annual records began in 1997. The previous record decline was negative 13.2% in 2009.

Figure 10 shows how these revisions have affected the monthly path of construction output between the data in today's release compared with the Construction output in Great Britain: January 2021 release published 12 March 2021.

Minimal revisions to the monthly path can be seen in the first half of 2020, however, the April trough is now estimated to have been weaker in the latest data. The month-on-month fall for April 2020 has been revised from negative 40.7% in the previous release (January 2021 release published 12 March 2021) to negative 41.6% in this release. The main differences can be seen from July 2020 onwards where downward revisions see a more subdued profile of monthly growth in the second half of 2020.

Revisions to quarterly construction output growth can be found in Table 3. The most notable revision can be seen in Quarter 4 (Oct to Dec) 2020, where late and revised survey returns led to the quarter being revised down 1.9 percentage points from 4.6% to 2.7%.

In addition to the revisions to construction output first published within the GDP quarterly national accounts, UK: October to December 2020 release, this publication also includes revisions to January 2021 data first published in Construction output in Great Britain: January 2021 on 12 March 2021

The monthly growth for construction output, all work, chained volume measure, seasonally adjusted series for January 2021 is revised down 0.9 percentage points from 0.9% to 0.0%. This is mainly because of late survey returns replacing imputed values (which in turn has affected those businesses who are still imputed for because of non-response).

Details of why revisions can be seen across the whole period are available in the Measuring the data section.

For further information on the revisions profile please see the output in the construction industry revisions triangles published on a one-month and three-month growth basis.

Construction output estimates

Construction output estimates are monthly estimates of the amount of output chargeable to customers for building and civil engineering work done in the relevant period, excluding Value Added Tax (VAT) and payments to subcontractors.

Seasonally adjusted estimates

Seasonally adjusted estimates are derived by estimating and removing calendar effects (for example, leap years in 2012, 2016 and 2020) and seasonal effects (for example, decreased activity at Christmas because of site shutdowns) from the non-seasonally adjusted estimates.

Value estimates

The value estimates reflect the total value of work that businesses have completed over a reference month.

Volume estimates

The volume estimates are calculated by taking the value estimates and adjusting to remove the impact of price changes.

The ONS is publishing more data and analysis than ever before. We are constantly reviewing our publications based on your feedback to make sure that we continue to meet the needs of our users. As a result, future editions of this publication will focus more strongly on headline indicators and main messages. Thank you for your continued support and we value your feedback.

Construction output data collection

Our monthly Construction Output Survey measures output from the construction industry in Great Britain. The survey samples 8,000 businesses, with all businesses employing over 100 people, or with an annual turnover of more than £60 million, receiving an online questionnaire every month. The survey's results are used to produce non-seasonally and seasonally adjusted monthly, quarterly, and annual estimates of output in the construction industry at current price and at chained volume measures (removing the effect of changes in price).

Data on new orders supplied by Barbour ABI are used to model the breakdown of the overall output figures for Great Britain into the lower level and regional data seen in Tables 1 and 2 of Construction output: sub-national and sub-sector.

Quality and methodology

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Construction output QMI. 

Revisions to construction output data

Revisions in the release are a result of:

• late responses to survey returns replacing imputations, or revisions to original returns

• revisions to seasonal adjustment factors, which are re-estimated every month and reviewed annually

• HM Revenue and Customs (HMRC) Value Added Tax (VAT) returns replacing Monthly Business Survey (MBS) data for small- and medium-sized businesses for Quarter 3 (July to Sept) 2020 for the first time as well as potential revisions to previous VAT turnover data

• revisions to the input series for the Construction Output Price Indices

Value Added Tax (VAT) data

Alongside the MBS, further information on output is gained from VAT turnover data, which are used to replace survey data for small- and medium-sized businesses. However, because of the delay in companies making VAT returns, these data are only taken on after a lag period. Currently, VAT turnover data are used for the period Quarter 2 (Apr to June) 2016 to Quarter 3 (July to Sept) 2020.

Further information on the use of VAT turnover in construction output estimates and its impact can be found in the following articles:

• VAT turnover implementation into national accounts

• VAT turnover data in national accounts: background and methodology

• Quality assurance of administrative data (QAAD) report for VAT turnover data

Coronavirus impact on the Office for National Statistics (ONS) construction output in February 2021

Temporary ceasing of Output in the construction industry: sub-national and sub-sector data

The coronavirus (COVID-19) pandemic presents a significant challenge to the UK, and the ONS is working to ensure that the UK has the vital information needed to respond to the impact of this pandemic on our economy and society. This means we will need to ensure that information is provided faster, using new data sources, and changing how our surveys operate, to ensure we provide the information necessary as the situation unfolds.

The effects of the outbreak on ONS capacity and capability during this period meant we reviewed the existing construction statistics releases and temporarily suspended the Output in the construction industry: sub-national and sub-sector dataset. This was to protect the delivery and quality of our remaining outputs as well as ensuring we could respond to new demands as a direct result of the coronavirus. This was also partially a reflection of the limitations of the model used to apportion new orders data to produce sub-level output data.

Following a quality assurance review of the input data into this model in part to reflect the impact of the coronavirus, the ONS plans to resume publication of this dataset in the next release on 12 May 2021. This release will contain quarterly sub-national and sub-sector data for the first time from Quarter 1 (Jan to Mar) 2020 to Quarter 1 2021 and revisions will be taken on to current available data to reflect these improvements.

Impact of online data collection on response rates

Data for the Monthly Business Survey for construction and allied trades (MBS) moved to an online data collection platform for April 2020 onwards, allowing respondents to log on from any location and submit their data at an appropriate time.

Table 4 shows the response rates to the MBS at time of publishing, for each reference period. While response rates are lower in the pandemic period in comparison with periods prior at time of first estimate, further responses have since been submitted and will be used subject to the National Accounts Revisions Policy.

Response rate for February 2021 was 74.8% measured by turnover coverage, which was the second highest rate at first estimate since February 2020. Response rate by questionnaire coverage was 57.2% for February 2021, which was the highest at first estimate since October 2020.

While international best practice is used to impute for non-response, with the lower response rates highlighted in Table 4, it is important to note that the revisions to the months over the pandemic period may be larger than the revisions profile prior, as actual data and revised data replace the larger than normal number of imputations for non-response at the time of the first monthly estimate.

Zero return responses to the MBS

A zero return refers to when a survey respondent reports figures of zero across all types of work, meaning the total value of work done is zero for that reference month. Figure 11 shows zero returns as a proportion of all returns at the time of the first estimate for a reference month. This is broken down by size of business as per registered turnover on the IDBR (Inter-Departmental Business Register).

Prior to March 2020 there was a stable element of approximately 7% to 10% of businesses reporting zero returns present, followed by a sharp increase in April 2020. Since April 2020, the proportion of zero returns declined until November 2020. Since then there have been four consecutive increases in the proportion of zero returns, to 13.7% in February 2021.

This is the highest proportion of zero returns since June 2020 when it was 17.4%, and likely because of the national lockdown that came into effect on 6 January 2021. However, the construction industry was able to remain broadly open unlike during the first lockdown, with the proportion of zero returns substantially lower than in April 2020 as a result.

It is worth noting small-sized (less than £1 million registered annual turnover) and medium-sized (£1 million to £10 million registered annual turnover) businesses make up the majority of these zero returns. This is the case both during and before the period affected by lockdown.

Coronavirus effect on the February 2021 seasonal adjustment

The monthly chained volume measures are seasonally adjusted using a seasonal adjustment software tool (X-13-ARIMA-SEATS). The monthly series individual type of work series is then aggregated to form the quarterly seasonally adjusted chained volume measure series.

The seasonal adjustment parameters for output in the construction industry are reviewed annually. However, because of the volatility of these statistics, time series analysis experts are regularly asked to review the seasonal adjustment when required. This approach has been adopted for all months over the pandemic period and has resulted in changes to seasonal adjustment specification files to ensure the seasonal adjustment parameters are appropriate.

End of EU exit transition period

As the UK enters into a new Trade and Co-operation Agreement with the EU, the UK statistical system will continue to produce and publish our wide range of economic and social statistics and analysis. We are committed to continued alignment with the highest international statistical standards, enabling comparability both over time and internationally, and ensuring the general public, statistical users and decision-makers have the data they need to be informed.

As the shape of the UK's future statistical relationship with the EU becomes clearer over the coming period, the ONS is making preparations to assume responsibilities that as part of our membership of the EU, and during the transition period, were delegated to the statistical office of the EU, Eurostat. This includes responsibilities relating to international comparability of economic statistics, deciding what international statistical guidance to apply in the UK context and to provide further scrutiny of our statistics and sector classification decisions.

In applying international statistical standards and best practice to UK economic statistics, we will draw on the technical advice of experts in the UK and internationally, and our work will be underpinned by the UK's well-established and robust framework for independent official statistics, set out in the Statistics and Registration Service Act 2007. Further information on our proposals will be made available later this year.

As with January 2021, there was limited anecdotal information received to the MBS for February 2021 regarding the impact of the end of the EU exit transition period on 31 December 2020, with evidence from the Business Insights and Conditions Survey (BICS) for February 2021 suggesting a limited effect on the industry because of this. There was comparatively more anecdotal information suggesting the coronavirus remains the main factor affecting businesses in February 2021.

Data quality

These estimates are widely used by private and public sector institutions, particularly by the Bank of England and HM Treasury, to assist in informed decision-making and policymaking. Construction output is an important economic indicator and is also therefore used in the compilation of the output measure of gross domestic product (GDP).

Further information on Uncertainty and how we measure it for our surveys is available.

National Statistics status

Great Britain construction output statistics and construction new orders are designated as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Statistics.

Comparability

Headline volume estimates of construction output are assessed against international guidelines such as Eurostat's handbook on price and volume measures in national accounts. The Organisation for Economic Co-operation and Development (OECD) production in construction estimates are also available, for both OECD and non-OECD countries.

Construction output data used within this release are also used in the compilation of the GDP monthly estimate. While monthly data are available in the output in the construction industry back to January 2010, a longer time series back to 1997 can be obtained in the monthly GDP datasets. Monthly data prior to 2010 are derived using statistical methods from the available quarterly construction output data and should therefore be treated with some caution.

Within this publication, a monthly, all work chained volume measure, seasonally adjusted series can be obtained back to January 1997 in index form to four decimal places. This can be found in the following datasets: Monthly GDP and main sectors to four decimal places and Monthly gross domestic product: time series.