Construction output in Great Britain: February 2022

• Monthly construction output decreased by 0.1% in volume terms in February 2022, which was the first monthly decrease since October 2021; this follows an upwardly revised 1.6% increase in January 2022.

• Anecdotal evidence from returns received for the Monthly Business Survey for Construction and Allied Trades suggested the storms experienced between 16 and 21 February 2022 resulted in projects being delayed, as more working days were lost on sites and premises than normal for this time of the year.

• The decrease in monthly construction output in February 2022 came from a decrease in repair and maintenance (0.5%) as new work saw a slight increase of 0.1% on the month.  

• At the sector level, the main contributors to the decline in February 2022 were infrastructure, and non-housing repair and maintenance, which decreased by 2.5% and 0.9% respectively. 

• The level of construction output in February 2022 was 1.1% (£155 million) above the February 2020 pre-coronavirus (COVID-19) level; new work was 3.7% (£354 million) below, while repair and maintenance work was 10.2% (£509 million) above.

• Despite the monthly decrease, construction output rose 2.4% in the three months to February 2022; this is the strongest growth in the three-month on three-month series since June 2021 (4.0%), with similar increases seen in both new work, and repair and maintenance (2.2% and 2.6% respectively).

Monthly construction output decreased by 0.1% to £14,610 million in volume terms in February 2022 compared with January 2022. This is the first monthly decrease since October 2021 (a fall of 0.9%) following three consecutive months of growth.

Storms Dudley, Eunice and Franklin bought heavy rain across much of Great Britain between 16 to 21 February 2022, as detailed in the Met Office’s February 2022 release. For the construction industry this caused delays and some projects to be suspended. This was because more working days were lost on sites and premises than normal for this time of the year. However, some businesses reported a positive impact as they picked up repair and maintenance work caused from storm damage.

Anecdotal evidence from returns received for both our Monthly Business Survey for Construction and Allied Trades and our Business Insights and Conditions Survey (BICS) suggested some of the issues in sourcing construction products remained. High costs and shortages of materials, particularly for the smaller sized firms, are still mentioned.

Despite these challenges, demand continued to be strong.  New orders in the construction industry grew by 9.2% in Quarter 4 (Oct to Dec) 2021 compared with Quarter 3 (July to Sept) 2021. All sectors recovered to above their pre-coronavirus (COVID-19) level. For more information see our Construction output in Great Britain: December 2021, new orders and Construction Output Price Indices, October to December 2021 bulletin.

Month-on-month construction output growth in February 2022

The 0.1% decrease in construction output in February 2022 represents a fall of £17 million compared with January 2022. Six out of the nine sectors saw a monthly decrease in February 2022.

Infrastructure new work and non-housing repair and maintenance were the largest contributions to the monthly decrease, decreasing 2.5% (£60 million) and 0.9% (£25 million) respectively.

The decrease in monthly growth in February 2022 in infrastructure new work is the sixth monthly decline out of the last seven months. This is despite infrastructure being the sector that is highest above its pre-coronavirus level (Table 1).

Public other new work, private housing new work and public housing repair and maintenance increased 10.5% (£74 million), 0.5% (£17 million) and 3.6% (£21 million), respectively. The increase in public other new work follows three consecutive monthly falls.

At the start of 2022, price rises are continuing to have a noticeable downward impact in volume terms for monthly output growth. Table 3 shows this by comparing monthly growth in value terms (the impact of price changes included) with volume terms (the impact of price changes removed). They are both on a seasonally adjusted basis.

Figure 6 shows these stronger rates of annual price growth in recent months. It uses the implied deflator, which is the best indicator of price changes in the industry until our next Construction output in Great Britain bulletin is published on 12 May 2022.

Figure 7 shows how intra-UK supply chains had been affected in February 2022.

In February 2022, 72% of construction businesses reported they were able to source materials, goods or services needed from within the UK. Of this, 27% reported changing supplier or finding alternative solutions. This is a small decrease compared with January 2022. It may partly explain the fall in the overall monthly construction output to negative 0.1% in February 2022.

Three-month on three-month construction output growth in February 2022

Construction output rose 2.4% (£1,004 million) in the three months to February 2022. This is the strongest growth in the three-month on three-month series since June 2021 (4.0%). Increases in new work (2.2%) and repair and maintenance (2.6%) contributed to the growth, with seven out of the nine sectors seeing an increase.

Private housing new work, and non-housing repair and maintenance were the largest contributions to the rise. They increased by 5.1% (£470 million) and 4.4% (£346 million) respectively.

Public other new work and infrastructure new work were the only sectors to have seen falls, decreasing by 5.3% (£126 million) and 1.6% (£117 million).

Estimates in this release are consistent with our  GDP quarterly national accounts, UK: October to December 2021 bulletin published 31 March 2022.

Revisions have been incorporated back to January 2020. Reasons for the revisions include:

• revisions in the nominal data; this includes revisions to both the survey data and Value Added Tax (VAT) turnover data 

• this release is the first monthly release in which, where selected, VAT turnover data have been used for Quarter 3 (July to Sept) 2021 to replace survey data 

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

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

The 2020 annual rate of construction output growth is unrevised (a fall of 14.9%), whereas the 2021 annual rate is revised up 0.2 percentage points (PP) to 12.9%.  

The revisions to quarterly path (Table 4 in our GDP quarterly national accounts, UK: October to December 2021 bulletin) show the majority of revisions are within plus or minus 0.3 PP. Quarter 1 (Jan to Mar) 2021 and Quarter 2 (Apr to June) 2021 are outside of this range. They are revised down by 0.6 PP and up by 0.6 PP respectively. This is mainly from updated seasonal adjustment parameters.

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. This excludes 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 such as 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 effect of price changes.

Quality and methodology

For more quality and methodology information see our Construction output QMI published 8 August 2019, and our Construction output price indices QMI published 1 October 2018.

Sub-national and sub-sector output

Data on new orders supplied by Barbour ABI are used to model the breakdown of the overall output figures for Great Britain. This is into the lower level and regional data seen in Tables 1 and 2 of our Output in the construction industry: sub-national and sub-sector dataset published 11 February.

For more information on data on new orders supplied by Barbour ABI please see our Quality assurance of administrative data used in construction statistics methodology published 12 March 2018.

Accessibility of construction output datasets

We have been reviewing new accessibility of datasets legislation from The Public Sector Bodies Accessibility Regulations 2018. We have now updated all releases in our related datasets. If anyone has any feedback on the new layout please feel free to email us at construction.statistics@ons.gov.uk.

Consultation on release practices

The Office for Statistics Regulation has finalised its Consultation on the Code of Practice for Statistics. The Office for National Statistics (ONS) has welcomed the findings. Specifically noting that the release-time exemptions, which were granted during the coronavirus (COVID-19) pandemic, are now incorporated into the revised Code of Practice. As such, the output in the construction industry will continue to be published at 7am.

Bias adjustment

Typically, since the move to monthly gross domestic product (GDP) estimates, an adjustment to address any bias in survey responses for construction output is applied to the early construction output monthly estimates. For more information, see our Improvements to construction statistics: Addressing the bias in early estimates of construction output, June 2018 article.

The response rate for February 2022 is slightly lower. There was a 72.8% turnover response compared with a normal turnover response of approximately 79% for the first month in the year. Because of this, no comparable historical data are available at the time of the first estimate for a reference month. Therefore, we have not applied a bias adjustment for February 2022.

Blue Book 2021

In Blue Book 2021, a new framework was introduced to improve how we produce volume estimates of GDP for balanced years as part of the supply use process. This framework included the implementation of double-deflated industry-level gross value added (GVA) for the first time. This improvement was reflected in our September quarterly national accounts and October monthly GDP estimates for the first time.

As a result, volume estimates in the monthly GDP and construction outputs releases will differ for the period 1997 to 2019. This is because the construction publication measures the volume of construction work (output), while the GDP series measures GVA (that is, output minus intermediate consumption). Construction estimates will align, however, from January 2020 onwards on a growth basis.

For more information and indicative effects of this change to industry-level GVA volume, see our Impact of double deflation on industry chain volume measure annual estimates published 28 June 2021. Also see our Impact of Blue Book 2021 changes on quarterly volume estimates of gross domestic product by industry published 8 September 2021.