Construction output in Great Britain: September 2023, new orders and Construction Output Price Indices, July to September 2023

• Monthly construction output is estimated to have increased 0.4% in volume terms in September 2023; this came solely from an increase in repair and maintenance (2.1%), partially offset by a decrease in new work (0.8% fall) on the month. 

• At the sector level, three out of the nine sectors saw a rise in September 2023, with the main contributor to the monthly increase seen in private housing repair and maintenance, which increased 3.0%.

• Quarterly construction output increased 0.1% in Quarter 3 (July to Sept) 2023 compared with Quarter 2 (Apr to June) 2023, this came solely from growth in September 2023 after two months of falls; the quarterly increase was because of repair and maintenance (0.7%), while new work saw a decrease of 0.3%.

• Total construction new orders increased 3.9% (£393 million) in Quarter 3 2023 compared with Quarter 2 2023; this quarterly rise came mainly from public other new orders and infrastructure new orders, which increased 23.7% (£265 million) and 14.3% (204 million), respectively.

• The annual rate of construction output price growth was 3.9% in the 12 months to September 2023; this has slowed from the record annual price growth in May 2022 (10.4%).

Monthly construction output is estimated to have increased 0.4% in volume terms in September 2023. This follows two consecutive falls in monthly construction output.

Anecdotal evidence received from returns for the Monthly Business Survey for Construction and Allied Trades (MBS) suggested a positive effect of above-average temperatures increasing output. The Met Office confirmed in their Monthly climate summary (PDF) that September 2023 was the joint hottest September on record for England and Wales.

Detailed growth rates

Month-on-month construction output growth in September 2023

The 0.4% rise in construction output in September 2023 represents an increase of £60 million in monetary terms compared with August 2023, with three out of the nine sectors seeing an increase on the month.

Private housing repair and maintenance and private commercial new work were the largest positive contributors to the monthly increase in September 2023, increasing 3.0% (£76 million) and 3.6% (£66 million), respectively.

Quarter-on-quarter construction output growth in Quarter 3 (July to Sept) 2023

Alongside the monthly increase, construction output rose by 0.1% (£58 million) in Quarter 3 2023. This is the eighth quarter of consecutive growth in the quarterly series since Quarter 3 (July to Sept) 2021 (1.8% fall), however, the quarterly growth has slowed compared with the first half of 2022.

The quarterly growth came solely from an increase in repair and maintenance (0.7%), as new work saw a decrease of 0.3%.

The quarterly increase came solely from September 2023, as the other two months of Quarter 3 2023 saw decreases. Anecdotal evidence for September 2023 highlighted the effect of warm weather increasing output.

Of the nine sectors, three saw increases in Quarter 3 2023, with the largest contributors being non-housing repair and maintenance and private commercial new work. These sectors increased 2.0% (£187 million) and 5.1% (£276 million), respectively.

The largest negative contributor was private new housing, which fell 2.8% (£260 million).

In Quarter 3 2023, total construction new orders increased by 3.9% (£393 million) compared with Quarter 2 (Apr to June) 2023. This follows three consecutive quarterly falls in total construction orders. More information can be found in our New orders in the construction industry dataset.

Other new work new orders (that is, non-housing) was the largest contributor to the increase in Quarter 3 2023, increasing by 5.3% (£367 million). This mainly came from public other new orders, which increased by 23.7% (£265 million) and was caused by increases in schools and colleges, agriculture, and miscellaneous. The other largest contributor was infrastructure, which increased by 14.3% (£204 million). Private industrial saw the only decrease which was a fall of 7.8% (£103 million).

Housing new orders saw an increase of 0.8%. This came from both private and public housing, which saw increases of 0.9% and 0.1%, respectively.

Prices in the construction industry, as estimated by our Construction Output Price Index (OPI) dataset, decreased to 3.9% in the 12-month period to September 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 July 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 ourOutput in the construction industry revisions triangle (three-month growth) dataset.

Office for Statistics Regulation 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 gross domestic product (GDP) in our Impact of Blue Book 2023 article, released on 1 September. This will cover:

• 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, and uncertainty in early estimates of GDP

Sub-national and sub-sector construction 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. This is shown in Tables 1 and 2 of our Output in the construction Industry: sub-national and sub-sector dataset. More detail is available in our Quality assurance of administrative data used in construction statistics methodology.

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

Response rates for September 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 September 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 our GDP quarterly national accounts, UK: April to June 2021 bulletin and datasetand our GDP monthly estimate, UK: August 2021 bulletin 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, but on a growth basis from January 2021 onwards.

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.