The latest release from the Office of National Statistics shows that construction output fell for the second month running in January
The January 2025 ONS stats show that new work dropped, accounting for the 0.2% drop in construction output wholly.
Weather also had a particularly heavy impact on output, as storms and snow slowed down outdoor projects.
Some sectors suffered more than others
In spite of an overall drop, only three sectors of the nine covered saw a drop in January, including Private Commercial New Work (-6.1%) and Private Housing New Work (-1.8%).
Conversely, Repair and Maintenance grew, offsetting the decline somewhat.
Survey data also shows that heavy rain, snow, and storms were frequent enough to have an impact on construction output, through slowing down outdoor construction projects and delaying scheduled work.
Despite a monthly decrease, the three months to January 2025 show that output has grown by 0.4% overall. This is due to the rise in new work over the months, rising by 1.4% and Repair and Maintenance fell by 0.9%.
Still, momentum is weak as reflected in the monthly decline over December and January.
“President Trump’s tariff strategy has sown confusion and uncertainty across financial markets”
The latest ONS statistics indicate that growth is slow and fragile, with progress currently at constant risk of falling two steps back. International politics and world events are continuing to sow instability and uncertainty in all industries.
David Morrison, senior market analyst at FCA-regulated fintech and financial services provider, Trade Nation, comments:
“According to the latest figures from the ONS, monthly real GDP is estimated to have fallen by 0.1% in January. This looks to mainly have been caused by a fall in the production sector, after growth of 0.4% in Dec 2024. However, real GDP is estimated to have grown by 0.2% in the three months to January, compared to three months to October 2024 due to a growth in the services sector.
“The market reaction was muted, with shallow pullbacks in both sterling and pre-open FTSE 100. The latter is firmer this morning, taking its cue from an overnight rally across US stock index futures. The British pound is lower against the US dollar. But this represents some mild profit-taking following sterling’s sharp rally so far this month given overall dollar weakness. President Trump’s tariff strategy has sown confusion and uncertainty across financial markets. Unfortunately, this situation looks set to continue until the US president achieves his aims or comes to some sort of accommodation with his trading partners.”
Clive Docwra, managing director of property and construction consultancy McBains, said: “January’s 0.2% dip in output, following an equivalent fall in December, serves as a warning that confidence among some developers remains fragile. In particular, the industry will be concerned to see private commercial new work falling by more than 6% and private housing new work by 1.8%.
“The worry is that any longer term stagnation in the wider economy risks having an impact in terms of investor uncertainty, which may lead to further projects being put on hold. The government’s Planning and Infrastructure Bill, published earlier this week, contains welcome measures to speed up the planning system, and the industry will hope this injects more confidence among developers and investors in the months ahead.”
The report can be read in full here.
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