UK construction output slows badly – “August a serious misfire but housebuilding is booming” – Naismiths surveyors

Gareth Belsham, director of the national property consultancy and surveyors Naismiths, commented:

“The construction industry as a whole has been brought down to earth with an almighty bump, but housebuilding is booming.

“The gravity-defying, record-smashing growth of June and July was always going to be a tough act to follow.

“Overall the August data is a serious misfire. Even the most cautious predictions expected more from the month than this, and the recovery is starting to look less v-shaped and more r-shaped.

“Total construction output is still nearly 11% adrift of its pre-Covid level and the boom seen at the start of 2020 might as well be years, not just months, ago.

“But while things remain bleak in much of the commercial property sector, the impact of Britain’s house price boom is re-energising residential construction.

“Housebuilders are racing to respond to surging demand, and new residential work spiked by £310m in August, far more than all the other subsectors combined. By contrast, new industrial work is still a punishing 40.9% down on its pre-pandemic level as subsectors within the construction industry start to head in opposite directions.

“Few sectors are better at responding to boom and bust than construction, but the worry now is that as the momentum of the summer’s bounceback fades, uncertainty will chip away at business confidence, depressing tender prices and creating a more polarised construction industry.”