UK Construction Sector Enjoys Strong Rebound

UK Construction Sector Enjoys Strong Rebound

Like most sectors in the UK economy, construction has been hit hard by the pandemic. Apart from the disruption of lockdowns, especially the first one last year, doubts about the economy and the future use of commercial property have held back new projects.

However, the latest data has revealed that the industry is bouncing back strongly. The Office For National Statistics (ONS) has revealed construction output increased by 1.6 per cent month-on-month in February, the highest monthly increase since September last year.  

The rise was the product of a 1.5 per cent increase in new work and a 1.9 per cent jump in repair and maintenance. It marked a sudden end to a slump that still saw output dip by 0.1 per cent in the three months to February from the previous quarter, a statistic that been be attributed fully to the plunge in work over December and January. 

Demand for forklift hire in the Midlands may rise significantly if the improvement continues, which the gradual opening up of the economy as the vaccination programme takes effect may well help bring about. 

There may be some underlying reasons for expecting the increase to continue. The rise in new work happened despite a 3.4 per cent dip in infrastructure, with private commercial work actually proving the biggest contributor. 

Going forward, commercial property may well rebound despite suggestions that remote working will become the norm for many people. In the meantime, residential construction will continue to be a key area as the government continues the stamp duty holiday and provides backing for 95 per cent mortgages. Apart from that, the need to tackle the housing shortage remains. 

Secondly, the fact that the increase in output occurred without a positive contribution from infrastructure means this is an area with great potential to add to workloads in the months ahead as new orders take effect.

Among those affecting the Midlands could be not just HS2 and the expansion of the Midlands Metro tram system, but the planned new Very Light Rail system in Coventry. 

In addition, with the metro mayoral election coming up, candidates have been pledging further extensions to the public transport infrastructure in the West Midlands. Current Mayor Andy Street has promised to double spending in this area and his Labour rival Liam Byrne has pledged to “build a better infrastructure for low carbon transport and public transport” in the region.

The candidates have also pledged significant increases in housing and also the development of new industry and employment. Cynics will suggest politicians seeking election will always say this, but if the winner achieves anything like as much as they have pledged this will mean much more residential and commercial construction output in the Midlands.

A further reason for optimism is that there is potentially much more bouncing back to do. Overall, the ONS calculated, the construction sector shrank by 14 per cent in 2020 and the level of output in February this year was still 4.3 per cent below the same month in 2020, the last one to be unaffected by the pandemic. 

While the future remains uncertain, the rebound in the construction sector certainly bodes well for the rest of 2021.

Construction output in Great Britain - Office for National Statistics

Construction rebound resumes as output jumps 1.6% | Construction Enquirer News

Building HS2 | High Speed 2

Expansion Programme - West Midlands Metro

Very Light Rail | Very Light Rail | Coventry City Council

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SPEECH: A New Future for the Heart of Britain  | Liam Byrne MP for Metro Mayor