Construction output in Great Britain: May 2021

• Construction output fell 0.8% in May 2021 with the level of output remaining slightly above its pre-pandemic February 2020 level; new work and repair and maintenance both contributed to the monthly decline in May 2021 with anecdotal evidence from businesses suggesting the adverse weather conditions being a contributing factor.

• Monthly construction fell by 0.8% in May 2021 from a month earlier because of declines in both new work (0.4%) and repair and maintenance (1.5%).

• The level of construction output in May 2021 was 0.3% (£43 million) above the February 2020 pre-pandemic level; while new work was 3.5% (£320 million) below the February 2020 level, repair and maintenance work was 7.5% (£363 million) above the February 2020 level.

• In contrast to the monthly fall, construction output grew by 6.3% in the three months to May 2021 compared with the previous three-month period, with increases in both new work and repair and maintenance of 6.6% and 5.8% respectively.

• The increase in new work (6.6%) in the three months May 2021 was because of growth seen in all sectors, the largest contributors to this growth were private housing new work and infrastructure, which grew by 7.4% and 9.7% respectively

• The increase in repair and maintenance (5.8%) in the three months to May 2021 was because of growth in non-housing and private housing repair and maintenance, which grew by 9.0% and 4.7% respectively.

Monthly construction output fell by 0.8% in May 2021 compared with April 2021, falling to £13,960 million, and follows the 0.7% monthly decline in April 2021.

These recent declines in monthly growths, follow exceptionally strong growth in February and March 2021 (3.7% and 4.7%) respectively. In May 2021 anecdotal evidence received from survey returns suggested adverse weather conditions (PDF, 105KB) (the fourth wettest May on record since 1862) were a contributing factor to the fall, as businesses lost working days.

With the 0.8% fall in May 2021, the level of construction output is now 0.3% (£43 million) above its February 2020 pre-pandemic level, with a mixed profile of recovery at a type of work level (Table 1).

While repair and maintenance is now 7.5% (£363 million) above the February 2020 level, new work has still yet to recover and is 3.5% (£320 million) below the pre-pandemic level.

Notes:

1. a= This denotes a record increase in growth for this series type since the monthly output records began in January 2010.

The 0.8% fall in construction output in May 2021 represents a fall of £115 million in monetary terms compared with April 2021.

Private housing repair and maintenance was the largest contributor to the monthly decline, falling by 2.5% (£48 million).

Infrastructure new work and private housing new work were the only two sectors that saw monthly growth in May 2021, of 2.3% (£49 million) and 1.4% (£41 million) respectively.

In infrastructure, anecdotal evidence suggests the mixture of a strong pipeline of orders before the coronavirus (COVID-19) pandemic and being able to more easily implement social distancing measures on larger civil engineering sites has meant infrastructure has performed relatively strong over the pandemic period. For private new housing, anecdotal evidence suggests the stamp duty holiday continues to drive demand for housing activity in May 2021.

Construction output grew by 6.3% (£2,512 million) in the three months to May 2021. Outside of August 2020 to November 2020 this is the largest growth in the three-month on three-month series since monthly records began in January 2010.

New work grew by 6.6% (£1,640 million) in the three months to May 2021, the largest contributor to which was private housing which grew by 7.4% (£639 million).

Repair and maintenance grew by 5.8% (£872 million) in the three months to May 2021. This was because of growth in both non-housing repair and maintenance and private housing repair and maintenance which grew by 9.0% (£670 million) and 4.7% (£261 million).

Figure 7 shows a time series of how the fortnightly construction turnover estimates compare to normal expectations for this time of year from the Business Insights and Conditions Survey (BICS).

Businesses reporting lower turnover than normal has continued to fall since February 2021 to 24% in June 2021. In turn, businesses reporting “turnover increased” or “turnover unaffected” have both steadily increased since February 2021, remaining broadly stable at 10% and 55% in the latest Wave 33, respectively. This suggests businesses have been returning to normal levels of turnover.

The construction turnover estimates using BICS broadly reflect the three consecutive months of strong growth seen in the three-month on three-month construction output all work estimates since February 2021 to May 2021.

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 the Construction output QMI and 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.

As a result of improvements implemented in our March 2021 dataset, an article addressing these developments including the impact of the changes will be published on 20 July 2021.

Revisions to construction output

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, please see the output in the construction industry revisions triangles published on a one-month and three-month growth basis.

Blue Book 2021

In Blue Book 2021 a new framework will be introduced to improve how we produce volume estimates of GDP for balanced years as part of the supply use process. This framework includes the implementation of double-deflated industry-level gross value added for the first time. This improvement will be reflected in the September quarterly national accounts and October monthly GDP estimates. On 28 June we published Blue Book 2021 indicative impacts of this change to industry level gross value added volume.

Estimates for the construction industry from this new approach will differ to those published in this Construction output release as they account for both the outputs produced and inputs consumed by the industry. There are also some coverage differences given the use of the Annual Business Survey in their compilation.

Data quality

These estimates are widely used by private and public sector institutions to assist in informed decision-making and policymaking.

Further information on Uncertainty and how we measure it for our surveys is available.

Comparability

While monthly data are available for output in the construction industry back to January 2010, a longer time series back to 1997 can be obtained in the Monthly GDP datasets.

Monthly data prior to 2010 are derived using statistical methods from the available quarterly construction output data and should therefore be treated with some caution.