Construction output in Great Britain: January 2022

• Monthly construction output increased by 1.1% in volume terms in January 2022 and is now at its highest level since September 2019; this follows an increase of 2.0% in December 2021 and is the third consecutive monthly growth greater than 1.0%.

• The increase in monthly construction output in January 2022 came solely from an increase in repair and maintenance (4.6%) as new work saw a slight decrease of 0.8% on the month. 

• At the sector level, the main contributors to growth in January 2022 were private housing repair and maintenance and non-housing repair and maintenance, which grew by 5.0% and 5.5%, respectively.

• The level of construction output in January 2022 was 1.4% (£197 million) above the February 2020 pre-coronavirus (COVID-19) pandemic level. New work was 2.8% (£267 million) below the February 2020 level, while repair and maintenance work was 9.3% (£464 million) above the February 2020 level.

• The recovery to date (since the falls at the start of the coronavirus pandemic) is mixed at a sector level, with infrastructure 37.9% (£709 million) above and private commercial 27.8% (£693 million) below their respective February 2020 levels in January 2022.

• Alongside the monthly increase, construction output rose 3.0% in the three months to January 2022; this is the strongest growth in the three-month on three-month series since June 2021 (3.4%), with increases seen in both new work and repair and maintenance (4.0% and 1.4%, respectively).

Monthly construction output increased by 1.1% to £14,676 million in volume terms in January 2022 compared with December 2021. This is the highest level of construction output since September 2019 (£14,726 million) and is the third consecutive monthly growth greater than 1.0%.

Anecdotal evidence from both returns received for the Monthly Business Survey for Construction and Allied Trades and the Business Insights and Conditions Survey (BICS) suggested some of the issues in sourcing construction products in the latter half of 2021 had continued to ease. Along with the easing of supply chain constraints, new orders in the construction industry continued to perform strongly, growing by 9.2% in Quarter 4 (Oct to Dec) 2021 compared with Quarter 3 (July to Sept) 2021. All new orders sectors had recovered to above their pre-coronavirus (COVID-19) pandemic level, highlighting demand for all types of work across the industry.

Month-on-month construction output growth in January 2022

The 1.1% rise in construction output in January 2022 represents a rise of £162 million in monetary terms compared with December 2021. Six out of the nine sectors saw an increase in monthly growth in January 2022.

Non-housing repair and maintenance and private housing repair and maintenance were the largest contributions to the monthly rise in January 2022, increasing by 5.5% (£143 million) and 5.0% (£98 million), respectively.

The monthly growth in private industrial new work (2.1%) is also noteworthy because it represents a return to above its pre-coronavirus (COVID-19) pandemic February 2020 level of output.

Infrastructure new work, public other new work and public housing repair and maintenance were the three sectors that fell in January 2022, decreasing by 4.7% (£128 million), 9.1% (£68 million) and 0.6% (£4 million), respectively.

Despite the relatively large decrease in monthly growth in infrastructure, which was the largest decline since April 2020 (down 23.0%), the sector has performed strongly over recent months. It was the main contributor to the growth in the three months to January 2022 (Figure 6).

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

Construction output rose 3.0% (£1,275 million) in the three months to January 2022. This is the strongest growth in the three-month on three-month series since June 2021 (3.4%). Increases in both new work and repair and maintenance (4.0% and 1.4%, respectively) contributed to the growth.

Infrastructure new work and private housing new work were the largest contributions to the three monthly rise, increasing by 5.2% (£388 million) and 3.4% (£306 million), respectively.

Public other new work and private housing repair and maintenance were the only two sectors to have seen falls in the three months to January 2022, decreasing by 3.6% (£86 million) and 0.5% (£33 million).

The strength in the three months to January 2022 is partly because of the easing in sourcing construction products in recent months. As illustrated in Figure 7, the supply chain issues experienced in the latter half of 2021 have continued to ease in January 2022.

In October 2021, 11.0% of construction businesses were unable to source materials, goods or services needed from within the UK. This has since fallen to 3.0% in January 2022.

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 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 impact of price changes.

Quality and methodology

More quality and methodology information is available in:

• Construction output QMI

• Construction output price indices QMI

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 into the lower level and regional data seen in Tables 1 and 2 of Construction output: sub-national and sub-sector.

Revisions to construction output

In this release, no revisions have been made to construction output data prior to January 2022.

The next Construction Output in Great Britain release on 11 April 2022 will see revisions to the periods January 2020 to January 2022 in line with the National Accounts Revision Policy. These revisions will be consistent with the Quarterly National Accounts release published on 31 March 2022, which will cover the period from Quarter 1 (Jan to Mar) 2020 to Quarter 4 (Oct to Dec) 2021. 

Bias adjustment

Typically, since the move to monthly GDP estimates, an adjustment to address any bias in survey responses for construction output is applied to the early construction output monthly estimates.

Like November 2021 and December 2021, the response rate for January 2022 is slightly lower (68.8% turnover response compared with a normal turnover response of approximately 79% for the first month in the year). There is no comparable historical data available at the time of the first estimate for a reference month, so we have not applied a bias adjustment for January 2022.

Blue Book 2021

In Blue Book 2021, a new framework was introduced to improve how we produce volume estimates of gross domestic product (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 the 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 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.

Articles on the impact of double deflation and Blue Book changes provide information and indicative effects of this change to industry-level GVA volume.