Construction output in Great Britain: June 2023, new orders and Construction Output Price Indices, April to June 2023

• Monthly construction output is estimated to have increased 1.6% in volume terms in June 2023; this came from increases in both new work (2.0%) and repair and maintenance (1.1%) on the month. 

• At the sector level, six out of the nine sectors saw a rise in June 2023, with the main contributors to the monthly increase seen in infrastructure new work and non-housing repair and maintenance, which increased 4.7% and 3.4%, respectively.

• Quarterly construction output increased 0.3% in Quarter 2 (Apr to June) 2023 compared with Quarter 1 (Jan to Mar) 2023; the increase came solely from June 2023, with an increase in repair and maintenance (0.9%), while new work saw a decrease of 0.1%.

• Total construction new orders decreased 7.1% (£786 million) in Quarter 2 2023 compared with Quarter 1 2023; this quarterly fall came mainly from public other new orders and infrastructure new orders, which fell 32.9% (£576 million) and 26.5% (£519 million), respectively.

• The annual rate of construction output price growth was 4.6% in the 12 months to June 2023; this has slowed from the record annual price growth in May 2022 (10.4%).

Monthly construction output increased 1.6% in June 2023. This follows three consecutive falls in monthly construction output. This is the highest level of construction output (£15,620 million) since records began in January 2010.

Anecdotal evidence received from returns for our Monthly Business Survey for Construction and Allied Trades (MBS) suggested a positive effect of warm weather increasing output across sectors. The Met Office confirmed in their Monthly climate summary (PDF 5,862KB) that the provisional UK mean for June 2023 was the warmest since 1884.

Detailed growth rates

Month-on-month construction output growth in June 2023

The 1.6% rise in construction output in June 2023 represents an increase of £249 million in monetary terms compared with May 2023, with six out of the nine sectors seeing an increase on the month.

Infrastructure new work and non-housing repair and maintenance were the largest positive contributors to the monthly increase in June 2023, increasing 4.7% (£116 million) and 3.4% (£102 million), respectively.

This is the fourth consecutive monthly increase in infrastructure new work. Anecdotal evidence suggests continued strength in this sector, with warm weather allowing construction project work to progress in June 2023.

Quarter-on-quarter construction output growth in Quarter 2 (Apr to June) 2023

Alongside the monthly increase, construction output rose by 0.3% (£137 million) in Quarter 2 2023. This is the seventh quarter of consecutive growth in the quarterly series since Quarter 3 (July to Sept) 2021 (1.6% fall), however, the quarterly growth has slowed in comparison with the first half of 2022.

The quarterly growth came solely from an increase in repair and maintenance (0.9%), as new work saw a decrease of 0.1%.

The quarterly increase came solely from June 2023, as the other two months of Quarter 2 2023 saw decreases. Anecdotal evidence highlighted the effect of weather, with firms noting that warm weather conditions increased output.

Of the nine sectors, five saw increases in Quarter 2 2023, with the largest contributors being infrastructure new work, and non-housing repair and maintenance. These sectors increased 6.1% (£433 million) and 2.7% (£246 million), respectively.

The largest negative contributor was private new housing, which fell 3.3% (£324 million).

In Quarter 2 2023, total construction new orders decreased by 7.1% (£786 million) compared with Quarter 1 (Jan to Mar) 2023. This is the third consecutive fall in total construction orders, with Quarter 2 2023 being the lowest level (£10,222 million) since Quarter 4 (Oct to Dec) 2020 (£9,797 million). More information can be found in our New orders in the construction industry dataset.

Other new work new orders (non-housing) was the largest contributor to the decrease in Quarter 2 2023, as it fell by 11.3% (£903 million). This mainly came from public other new work new orders, which decreased by 32.9% (£576 million) and was driven by falls in health, and schools and colleges. The other largest negative contributor was infrastructure, which decreased 26.5% (£519 million). Private commercial saw an increase of 14.3% (£385 million), which was the largest growth out of all seven sectors.

Housing new orders saw an increase of 3.9%. This came from both private and public housing, which saw increases of 3.6% (£97 million) and 5.8% (£21 million), respectively.

Evidence from our data suppliers, Barbour ABI, suggests that the fall in new orders is because of the cost-of-living crisis and the related slowdown in the wider economy. This caused uncertainty in the commercially sensitive construction sectors, along with a slowdown in the award of government contracts in traditional heavy infrastructure  (rail and road).

Prices in the construction industry, as estimated by our Construction Output Price Index (OPI) dataset, decreased to 4.6% in the 12-month period to June 2023. The rate of annual price growth has slowed from the record increases seen in May 2022 (10.4%).

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 our:

• Construction output QMI

• Construction output price indices (OPIs) QMI

• New orders in construction QMI

Reasons for revisions to construction output in this release

This release contains revisions to construction output estimates from April 2023 onwards, and is consistent with the National Accounts Revisions Policy.

Revisions in this release are a result of:

• revisions in the nominal data; this includes revisions to the 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 (OPIs)

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.

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

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 June 2023 showed improvement compared with levels in recent years since the coronavirus (COVID-19) pandemic.  As such, we have not applied a bias adjustment for June 2023 while we review this approach going forward.

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 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 full bulletin, following a number of previous headline-only releases. 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.