The Office for National Statistics (ONS) has published their construction update for September, highlighting a slight increase in construction output
Q3 2024 is estimated to have an increased overall construction output compared to Q2, thanks to an increase in new work.
The report also details which sectors have seen a slight regression.
Repair and Maintenance construction overall output fell by 0.6%
Monthly, construction output grew by 0.1% in September, thanks to a growth of 0.4% in repair and maintenance, but new work fell by 0.2%.
At a sector level, four of the nine sectors grew in September with the main increase coming from private housing repair and maintenance, a growth of 1.3%.
Despite mild positivity in growth, the industry has seen a fall of 22% in new orders, worth £2,722, in Q3 2024 from the previous quarter. Private new housing and private commercial new work fell by 31.3% and 20.8%.
Still optimistic despite slower growth
Damien Wynne, co-founder of Q New Homes, said: “Construction output continued its upward trajectory in September, with this latest data confirming positive growth both on a quarterly and monthly basis.
“The modest rise of 0.1% in September follows a stronger performance in August, and four out of nine sectors are showing positive change.
“Despite rising costs faced by firms, the sector’s recovery has sparked optimism for the months ahead, with the Government committing to ambitious housebuilding targets. As most of the growth we are seeing is coming from new work, this appears to be the area driving the most significant positive change.
“The optimism is further supported by a recent Bank of England decision to cut interest rates for the second time this year, which is expected to provide additional support to the developers by making it cheaper to borrow. This, combined with inflation predictions hovering near the government’s 2% target until 2029, signals a stable economic environment for the UK construction industry.
“We believe that these factors will help boost consumer confidence, while the government’s £5bn housing development commitment — announced in the budget — demonstrates a long-term focus on nurturing a healthy construction market.
“The details on how energy-efficient any of this construction is remains a mystery. Unfortunately, we have still not been reassured that the ambition shown in the targets translates to how sustainable these buildings are. We already know that green homes are built to last, so some clarification on this would be welcome.
“As we move into 2025, the construction industry is likely to face heightened competition, particularly in the housing sector. Developers will need to adapt to a recovering market where both demand and supply continue to balance out.
“Energy-efficient homes, which align with growing environmental concerns, will be increasingly sought after, as buyers look for properties that offer long-term savings on energy costs.
“The growing emphasis on sustainability and carbon reduction will push developers to adopt modern construction methods, ensuring that quality, comfort, and eco-friendliness remain at the forefront of new-build designs.
“As the market stabilises and grows, these factors will be crucial for success in the years to come.”
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