Construction new work output increased by over 2% in the year to Q1 2023, according to the latest data release from the Office for National Statistics. All sub-sectors recorded expansion over the 12-month period to Q1, underscoring the resilience of activity across the industry in the early part of 2023. The only exception to this was public sector housing, which saw a reduced volume. Repair and maintenance work posted very strong growth at almost 8%. This is significant as the repair and maintenance sub-sector is an important and meaningful contributor to overall industry workload. Ongoing higher volumes here add to workforce pressures elsewhere in the industry, and their corresponding influence on other market dynamics.

The industry’s largest sub-sector – private housing – declined by 7% since its peak output in Q3 2022, indicating that this sub-sector is slowing materially now. Yet looked at another way, and measured against historical output trends, private housing continues to record substantial output volume each quarter. This said, the outsize influence of private housing activity and any adverse changes will impact headline data measures. Nominally, there is still good industry output at an aggregate level, which the various industry sentiment surveys reflect. As a result, construction sector sentiment continues to hold a position at or around its long-run average.

Two contributing factors to this prevailing view across the industry – output volume, albeit slowing in some sub-sectors, and the industry’s enduring supply chain constraints – are combining still to create the feeling that the industry remains busy more or less. The most revealing aspect of latest sentiment surveys is the mixed picture that they report. Whereas for a long time most sectors have moved with the same trend direction, now momentum is adjusting across sub-sectors. The construction sector overall continues to offer sound workload, especially for those supply chain firms that can work across sectors.

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