Monthly construction output is estimated to have grown by 0.4% in volume terms in November 2024; this follows an upwardly revised decrease of 0.3% in October 2024.
This is according to the latest data from the Office for National Statistics (ONS).
This increase in monthly output came from rises in both new work (0.3%) and repair and maintenance (0.5%).
At the sector level, five out of the nine sectors grew in November 2024, however housebuilding continued to struggle. Total new housing was down as too was new private housing.
The main contributors to the general monthly increase were private commercial new work and non-housing repair and maintenance, which grew by 3.1% and 1.1%, respectively.
Commenting on the latest figures Bloom Building Consultancy director Gareth Belsham said: “After a few bruising months, construction has jumped into pole position as the best performing sector of the economy.”
“But for all the surface sheen, the official data is far from a clean bill of health. Fortunes within the construction industry are diverging rapidly.
He added: “Private sector housebuilders built 1.2% less in November than they did in October, and new home construction as a whole is stuck in reverse.
“On the other side of the coin, commercial projects are booming on the back of rising demand for office space as employers seek to get more of their staff back into offices full time.
“New commercial sector construction surged by 3.1% on the month, and on the front line we’re seeing many commercial property developers pressing the button on previously paused investment plans, as well as an increase in the number of commercial property landlords investing in repair and refurbishment to generate extra value from their existing buildings.”
Belsham suggested that the surprise fall in inflation, coupled with wider GDP growth, should support fragile business sentiment and sustain this commercial sector momentum in coming months.
But he said the outlook for housebuilders was far less rosy. “High interest rates are still making it expensive for residential developers to buy land and build homes. Consumer demand is patchy too, making the contrast between residential and commercial construction acute.”
Shawbrook managing director of development finance Terry Woodley acknowledged the sector challenges currently supply chain issues, high costs and skills shortages but he insisted hope was on the horizon, with the Government’s ambitious housebuilding plans set to kick off in earnest this year.
“Indeed, its efforts to boost the planning system through its pronged approach of hiring more planning officers, and slashing planning red tape have been largely well received by developers. Though some questions still remain as to the feasibility and speed of these plans, it will be hoped that 2025 proves to be a fruitful year for the industry.”