Construction output in Great Britain: July 2023

• Monthly construction output is estimated to have decreased 0.5% in volume terms in July 2023; this follows a 1.6% increase in June 2023, with the monthly value in level terms in July 2023 at £15,546 million.

• The decrease in monthly output came solely from a 1.3% decrease in repair and maintenance, with new work increasing 0.1% on the month. 

• At the sector level, five out of the nine sectors saw a fall in July 2023, with the main contributors to the monthly decrease being private housing repair and maintenance, and private housing new work, which decreased 3.9% and 2.2%, respectively.

• Anecdotal evidence suggested the effect of heavy rainfall and lower-than-average temperatures in July 2023 leading to delays in planned work; additional evidence indicated a continued slowdown in the housing sector.

• Alongside the monthly decrease, construction output was flat in the three months to July 2023; this came from a 0.3% increase in new work, offset by a 0.4% decrease in repair and maintenance.

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 (QMI) is available in our:

• Construction output QMI

• Construction output price indices (OPIs) QMI

• New orders in construction QMI

Additional bank holiday in May 2023 for the Coronation of King Charles III

There was an additional bank holiday for the coronation of King Charles III on Monday 8 May 2023. While adjustments are made for regular calendar effects, there was no explicit adjustment for this ad hoc event. However, the timing of the bank holiday indirectly affects the number of trading days, which could affect construction estimates positively or negatively, depending on the sector. This should be taken into account when interpreting monthly movements over recent months.

Reasons for revisions to construction output in this release

In line with the National Accounts revisions policy, there are no revisions to previously published data, and July 2023 is being produced for the first time.

The next monthly construction output release will be published on 12 October 2023, and we are open for revisions for all periods. These revisions will be consistent with the quarterly national accounts release that will be published on 29 September 2023, and they will incorporate improved source data, updated seasonal adjustment parameters, and additional updated data as would happen in all quarterly national accounts releases. For further information on the revisions profile, see our Output in the construction industry revisions triangle (one-month growth) dataset and our Output in the construction industry revisions triangle (three-month growth) dataset.

Office for Statistics Regulation (OSR) review of GDP

The OSR will shortly be completing a review of the practices around the preparation and release of information about revisions to estimates of GDP in our Impact of Blue Book 2023 article released on 1 September. This will cover the following:

• processes and quality assurance in making revisions to GDP

• potential improvements to early estimates of GDP enabled through enhanced access to data

• communication of revisions to GDP, the story behind the most recent set of revisions in particular, and uncertainty in early estimates of GDP

Sub-national and sub-sector construction output

Data on new orders supplied by Barbour ABI, as shown in our Quality assurance of administrative data used in construction statistics methodology, are used to model the breakdown of the overall output figures for Great Britain into the lower level and regional data, as shown in Tables 1 and 2 of our Output in the construction Industry: sub-national and sub-sector dataset.

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. We show this in our Improvements to construction statistics: Addressing the bias in early estimates of construction output, June 2018 article.

Response rates for July 2023 showed improvement compared with levels in recent years since the coronavirus (COVID-19) pandemic. We have continued not to apply a bias adjustment for July 2023 while we review this approach in the future.

Differences with monthly GDP construction estimates

In Blue Book 2021, we introduced a new framework to improve how we produce volume estimates of GDP for balanced years as part of the supply use process. This was explained in our Producing an alternative approach to GDP using experimental double deflation estimates article. This improves 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 the GDP quarterly national accounts, UK: April to June 2021 and GDP monthly estimate, UK: August 2021 bulletins and datasets for the first time.

As a result, volume estimates in the monthly GDP and construction outputs releases will differ for the period 1997 to 2020. 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 2021 onwards on a growth basis.

Information and indicative effects of this change to industry-level GVA volume can be found in our Impact of double deflation on industry chain volume measure annual estimates article and our Impact of Blue Book 2021 changes on quarterly volume estimates of gross domestic product by industry article.

Publishing content review

This release is a headline-only bulletin.. We are currently reviewing the content we publish and are trialling a system of a full bulletin release on quarter months, with headline-only releases on the other two months of each quarter. There will be no change to the accompanying data and we will continue to publish all our usual datasets every month. We will announce a decision in a future release and welcome any feedback at construction.statistics@ons.gov.uk.