Rainy July sees slump in construction activity

Rainy weather has been blamed for a 0.5 per cent drop in construction activity in July.

Official figures published today by the Office for National Statistics (ONS) show monthly output saw a 1.3 per cent decrease in repair and maintenance work, with new work up 0.1 per cent up on June.

But figures for the quarter versus last year paint a more positive picture, with overall activity 2.5 per cent up on May-July 2022.

A statement from the ONS said: “Anecdotal evidence suggested the effect of heavy rainfall and lower-than-average temperatures in July 2023 leading to delays in planned work; additional evidence indicated a continued slowdown in the housing sector.”

Five out of the nine sectors saw a fall in July 2023, with the main contributors to the monthly decrease being private-housing repair and maintenance, and private-housing new work, which decreased 3.9 and 2.2 per cent respectively.

Beard Construction finance director Fraser Johns said: “With the UK seeing the wettest July for more than a decade, it should come as no surprise to see overall construction output take a dip.

“The continued slowdown in the housing sector is certainly helping to skew the entire industry picture, as both private-housing repair and maintenance, and new work continue to face sustained pressure.”

He welcomed the marginal increase in new work, saying: “It’s a reminder that while some sectors are facing real challenges, others are opening up with clients continuing to find their confidence.”

Despite the easing in inflation rises and the stabilisation of supply chain costs, the industry “remains very volatile with the picture changing from month to month”, Johns said.

Nicholas Hyett, investment analyst at investment firm Wealth Club, said: “The UK’s hokey-cokey economy isn’t making life easy for businesses or central bankers.

“With growth bouncing up and then down and interest-rate rises ruled in and then out, forward planning is difficult. That tends to make businesses nervous and keen to preserve cash – bad news for future economic growth and investment.”

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