Construction output in Great Britain: March 2022, new orders and Construction Output Price Indices, January to March 2022

Short-term measures of output by the construction industry, contracts awarded for new construction work in Great Britain and a summary of the Construction Output Price Indices (OPIs) in the UK for Quarter 1 (Jan to Mar) 2022.

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Cyswllt:
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Dyddiad y datganiad:
12 May 2022

Cyhoeddiad nesaf:
13 June 2022

1. Main points

  • Monthly construction output increased by 1.7% in volume terms in March 2022; this is the fifth consecutive monthly growth and a record high in monthly level terms (£14,994 million) since monthly records began in January 2010.

  • The increase in monthly construction output in March 2022 was driven by increases seen in both repair and maintenance (3.0%) and new work (1.0%); At the sector level, private housing repair and maintenance (5.8%) and private commercial new work (4.0%) were the main contributors to the monthly increase.

  • Anecdotal evidence from returns received for our Monthly Business Survey for construction and allied trades suggested storms between 16 and 21 February 2022 resulted in businesses seeing a higher workload in March 2022; this is because of the repair work derived from the storms.

  • The level of construction output in March 2022 was 3.7% (£539 million) above the February 2020 pre-coronavirus (COVID-19) pandemic level; new work was 1.6% (£148 million) below the February 2020 level, while repair and maintenance work was 13.8% (£687 million) above the February 2020 level.

  • Along with the monthly increase, construction output rose 3.8% in Quarter 1 (Jan to Mar) 2022; outside of the coronavirus pandemic period, this is the strongest quarterly growth since Quarter 1 2017 (3.9%).

  • Total construction new orders decreased by 2.6% (£346 million) in Quarter 1 2022 compared with Quarter 4 2021; despite this quarterly fall, all sectors are still above their pre-coronavirus pandemic level (Quarter 4 2019).

  • The annual rate of construction output price growth was 7.3% in the 12 months to March 2022; this was the strongest annual rate since records began in 2014.

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Estimates for March 2022 are subject to more uncertainty than usual because of challenges we have faced with data collection. This has led to lower response rates than those seen before and during the coronavirus pandemic.

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2. Construction output in March 2022

Monthly construction output grew 1.7% in volume terms in March 2022 compared with February 2022. This is the fifth consecutive month of growth and is the largest single-month growth since January 2022 (2.1%). Monthly construction output in March 2022 is now at its highest level (£14,944 million) since monthly records began in January 2010 (Figure 1).

The stormy spells (storms Dudley, Eunice and Franklin) seen between 16 and 21 February brought heavy rain and winds across much of the country. For the construction industry, working days were lost during this time. However, demand continued to be strong; anecdotal evidence received from a number of businesses for March 2022 reported a positive impact because they picked up repair and maintenance work in March caused by the storm damage.

The monthly growth in March 2022, following that seen in January and February, has resulted in the quarterly all work index in Quarter 1 (Jan to Mar) 2022 recovering to above its pre-coronavirus (COVID-19) pandemic level (Quarter 4 (Oct to Dec) 2019) for the first time (Figure 2).

Detailed growth rates

Month-on-month change in construction output in March 2022

Construction output grew 1.7% (£257 million) in March 2022 compared with February 2022.

Private housing repair and maintenance and private commercial new work were the largest contributors to the monthly increases, growing 5.8% (£121 million) and 4.0% (£72 million), respectively. Anecdotal evidence gathered over the month suggests the increases seen in private housing repair and maintenance resulted from businesses seeing a higher workload in March 2022. This higher workload was mostly repair work derived from the storms seen in the second half of February 2022.

Anecdotal evidence from businesses suggests the increase In March 2022 in private commercial came from an increase in offices. This is further shown in the new orders data, which is likely to be linked with an increasing number of refurbishments to office spaces taking place for employees returning to the office.

There was also a notable increase in the smaller sector of private industrial new work, which grew by 5.3% (£25 million). This continued to be strong over the last year and came from an increase in warehouses and distribution centres. This is further shown in the new orders data. Warehouses showed an increase likely to be linked to consumers change in shopping habits and online spending during the coronavirus pandemic. Our article on The rise of the UK warehouse and the “golden logistics triangle” covers this in more detail.

Quarter-on-quarter change in construction output in Quarter 1 2022

Construction output increased by 3.8% (£1,636 million) in Quarter 1 2022, following the 1.0% increase in Quarter 4 2021. Outside of the coronavirus pandemic period, this is the strongest quarterly growth since Quarter 1 2017 (3.9%).

Both new work and repair and maintenance saw large increases in Quarter 1 2022; these increases were 2.8% (£768 million) and 5.5% (£868 million), respectively.

Seven of the nine sectors saw an increase in Quarter 1 2022. The largest contributors were non-housing repair and maintenance, and private housing in both new work and repair and maintenance. These sectors increased by 7.4% (£581 million), 5.2% (£484 million), and 4.5% (£277 million), respectively.

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3. New orders in the construction industry in Quarter 1 2022

Total construction new orders decreased by 2.6% (£346 million) in Quarter 1 (Jan to Mar) 2022 compared with Quarter 4 (Oct to Dec) 2021. See our New orders in the construction industry dataset for more detail.

Despite the quarterly fall in new orders in Quarter 1 2022, new orders are still at a higher level than before the coronavirus (COVID-19) pandemic. Quarter 4 (Oct to Dec) 2019, which was the last full quarter not affected by the coronavirus pandemic. Compared with this, total construction new orders are now 13.7% (£1,563 million) higher, with all six sectors still above their pre-coronavirus pandemic level in Quarter 1 2022.

The quarterly fall in Quarter 1 2022 mainly came from housing new orders, which fell by 8.5% (£339 million). Within this, private new housing decreased by 8.5% (£310 million).

All other work new orders (such as non-housing) also saw a smaller decline in Quarter 1 2022 of 0.1% (£6 million). The main negative contributor was private industrial new orders, which fell by 19.8% (£372 million). However, private industrial has been very strong in recent quarters, with the most recent year-on-year growth being 45.8% (£2,095 million) (Table 3). Over this period, the number and value of orders for warehouses and factories have increased significantly, particularly when compared with their pre-coronavirus pandemic level. For warehouses specifically, this is likely to be owing to more online retail.

Private commercial was one of two sectors (infrastructure being the other) to see quarterly growth in new orders in Quarter 1 2022. This growth mainly came from new orders for offices (Figure 7). Project level data suggests that a large number of businesses are carrying out office refits and refurbishments as workers return to the office.

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4. Construction output price indices in March 2022

Prices in the construction industry, as estimated by our Construction Output Price Index (OPI) dataset, increased by 7.3% in the 12-month period to March 2022. This was the strongest annual rate of construction output price growth since records began in January 2014.

This supports the anecdotal evidence received from survey returns to our Monthly Business Survey for construction and allied trades. These returns continue to suggest higher pricing of raw materials such as steel, concrete, timber and glass has contributed to the overall rise in material costs throughout Quarter 1 2022.

The monthly rate of prices for all construction work was 0.6% in March 2022, which increased from 0.1% in February 2022. However, it is still below the level seen in January 2022, which was a record monthly rise of 1.4% since records began in 2014.

New work

The Construction OPI for new construction work grew 8.0% in the year to March 2022.

The new work sector with the strongest annual growth rate of prices was new housing, which rose 10.9%.

Repair and maintenance

The Construction OPI for all repair and maintenance grew 5.9% in the year to March 2022. This is the strongest rate of growth for repair and maintenance output prices since records began in January 2014.

The repair and maintenance sector with the strongest annual growth rate of prices was non-housing repair and maintenance, which rose 6.6%.

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5. Construction in Great Britain data

Output in the construction industry
Dataset | Released 12 May 2022
Monthly construction output for Great Britain at current price and chained volume measures, seasonally adjusted by public and private sector.

Output in the construction industry: sub-national and sub-sector
Dataset | Released 12 May 2022
Quarterly non-seasonally adjusted sub-national and sub-sector data at current prices, Great Britain.

Construction Output Price Indices
Dataset | Released 12 May 2022
Monthly Construction Output Price Indices (OPIs) by type of construction work, UK.

New orders in the construction industry
Dataset | Released 12 May 2022
Quarterly new orders at current price and chained volume measures, seasonally adjusted by public and private sector. Quarterly non-seasonally adjusted type of work and regional data.

Construction statistics annual tables
Dataset | Released 19 October 2021
The construction industry in Great Britain, including value of output and type of work, new orders by sector, number of firms and total employment.

Output in the Construction Industry
Dataset | Released 12 May 2022
Monthly construction output for Great Britain at current price and chained volume measures, seasonally adjusted by public and private sector.

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6. Glossary

Construction output estimates

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

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

Reflect the total value of work that businesses have completed over a reference month.

Volume estimates

Calculated by taking the value estimates and adjusting to remove the impact of price changes.

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7. Measuring the data

Quality and methodology

More quality and methodology information (QMI) is available in our:

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 our Construction output: sub-national and sub-sector dataset.

In this release, revisions are seen for some series in these tables back to 2012. These improvements are to reflect updates to the project level input data start dates, finish dates and valuations that have changed since the time of the new order being placed. See our accompanying methodology article for more information.

Revisions to construction output data

In this release, revisions to construction output estimates are back to January 2022. Both January 2022 and February 2022 monthly growth are revised upwards by 0.5 and 0.3 percentage points, respectively, to 2.1% and 0.2%.

Revisions in this 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
  • revisions to the input series for the Construction Output Price Indices

For further information on the revisions profile, see our Output in the construction industry revisions triangle (one-month growth) dataset basis and our Output in the construction industry revisions triangle (three-month growth) dataset.

Accessibility of construction output datasets

We have reviewed new accessibility of datasets legislation, and updated all datasets within this release, apart from the Construction Output Price Index (OPI) dataset, which will be updated in the next publication. If you have feedback on the new layout, please email construction.statistics@ons.gov.uk.

Consultation on release practices

The Office for Statistics Regulation (OSR) has finalised its consultation on release practices. ONS has welcomed the findings, specifically noting that the release time exemptions, which were granted during the coronavirus pandemic, are now incorporated into the revised Code of Practice. As such, our Output in the construction industry publication 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.

As the response rate for March 2022 is lower (65.8% turnover response compared with a normal turnover response of approximately 70% for the third month in a calendar quarter), no comparable historical data are available at the time of the first estimate for a reference month. We have therefore not applied a bias adjustment for March 2022.

Blue Book 2021

In the Blue Book 2021, a new framework to improve how we produce volume estimates of gross domestic product (GDP) for balanced years was introduced. 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 2021 quarterly national accounts and our October 2021 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.

Our Impact of double deflation articles and our Blue Book changes articles provide information and indicative effects of this change to industry-level GVA volume.

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Manylion cyswllt ar gyfer y Bwletin ystadegol

John Allcoat
construction.statistics@ons.gov.uk
Ffôn: +44 1633 456344