Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Strategy. Read the original article for full details.
Construction output edges up 0.1% in July, but private housing new work falls 4.9%
Construction output rose by 0.1% in July, according to the latest figures from the Office for National Statistics (ONS). However, industry experts are warning against reading too much into the headline figure.
The modest rise follows a fall of 0.1% in June and a fall of 0.8% in May. The July increase came solely from repair and maintenance work, which grew by 0.8%, while new work fell by 0.4%.
Private housing drives both the rise and the fall
The main contribution to the monthly increase in repair and maintenance was private housing repair and maintenance, which grew by 1.7%. At the same time, the largest contribution to the decrease in total new work was a fall of 4.9% in private housing new work.
Clive Docwra, managing director of property and construction consultancy McBains, said that while the headline figure may show an increase in output in July, the fact that this came solely from repair and maintenance work reflects the challenging conditions impacting the industry. He noted that private housing new work falling by close to 5% in July is particularly concerning at a time when the government is talking up the housebuilding sector, and that many construction firms are still feeling the impact of cost and inflationary pressures because of the Middle East crisis, leaving the overall picture as one of treading water.
Three-month picture shows a wider slowdown
Over the three-month period to July, total construction output is estimated to have fallen by 0.5%. This drop follows four consecutive increases in the three-monthly series, with strong growth of 1.3% and 1.5% seen in the three months to April and May respectively.
Over the latest three-month period, new work fell by 0.4% and maintenance by 0.7%. At the sector level, six out of nine sectors fell in the three months to July, with the main negative contribution coming from private housing repair and maintenance, which fell by 1.7%.
What this means for letting agents and inventory clerks
For those working in the lettings and property management sector, the figures suggest continued strength in private housing repair and maintenance activity on a monthly basis, even as new-build private housing work declines. The split between maintaining existing stock and building new homes has potential implications for housing supply and the condition of rental properties.
Source: Mortgage Strategy