Construction output in Great Britain: December 2023, new orders and Construction Output Price Indices, October to December 2023

• Quarterly construction output saw a decrease of 1.3% in Quarter 4 (Oct to Dec) 2023 compared with Quarter 3 (July to Sept) 2023; this came solely from a decrease in new work (5.0% fall), as repair and maintenance increased by 4.0%.

• Monthly construction output is estimated to have decreased 0.5% in volume terms in December 2023; this came solely from a decrease in new work (1.1% fall), as repair and maintenance increased 0.4% on the month.

• At the sector level, three out of the nine sectors saw a fall in December 2023, with the main contributors to the monthly decrease seen in infrastructure new work, and private housing repair and maintenance, which decreased 6.4% and 1.1%, respectively.

• Annual construction output increased by 2.0% in 2023 compared with 2022; this is the third consecutive year of annual growth.

• Total construction new orders decreased 13.1% (£1,361 million) in Quarter 4 2023 compared with Quarter 3 2023; this quarterly fall came mainly from the private commercial and industrial sectors, which decreased 18.1 % (£542 million) and 27.6% (£320 million), respectively.

• The annual rate of construction output price growth was 3.1% in the 12 months to December 2023; this has slowed from the record annual price growth in May 2022 and June 2022 (10.7%).

Monthly construction output is estimated to have decreased 0.5% in volume terms in December 2023. This is the third consecutive fall in monthly construction output, which resulted in a quarterly fall of 1.3%.

Anecdotal evidence received from returns for our Monthly Business Survey for Construction and Allied Trades (MBS) suggested a negative effect of seasonal weather decreasing output. The Met Office confirmed in their Monthly climate summary (PDF, 4.8MB) that December 2023 saw frost and snow during the first week of the month, and storms later in the month.

Detailed growth rates

Quarter-on-quarter construction output growth in Quarter 4 2023

Construction output fell by 1.3% (£599 million) in Quarter 4 (Oct to Dec) 2023. This is the largest negative growth in the quarterly series since Quarter 3 (July to Sept) 2021 (1.8% fall). The quarterly fall came solely from a decrease in new work (5.0%), as repair and maintenance saw an increase of 4.0%.

The quarterly decrease came from all three months of the quarter. Anecdotal evidence suggested negative effects of adverse weather across each month, including heavy rainfall, strong winds, cold temperatures and frost decreasing new work. Evidence also suggests that these weather effects led to increases in repair work across the repair and maintenance sectors.

Of the nine sectors, four saw decreases in Quarter 4 2023, with the largest contributors being private new housing, and infrastructure new work. These sectors decreased 8.0% (£698 million) and 7.5% (£558 million), respectively.

The largest positive contributor was private housing repair and maintenance, which increased 4.3% (£325 million).

Month-on-month construction output growth in December 2023

The 0.5% fall in construction output in December 2023 represents a decrease of £73 million in monetary terms compared with November 2023, with three out of the nine sectors seeing a decrease on the month.

Infrastructure new work, and private housing repair and maintenance were the largest negative contributors to the monthly decrease in December 2023, decreasing 6.4% (£149 million) and 1.1% (£29 million), respectively.

Year-on-year change in construction output in 2023

Total annual construction output increased 2.0% in 2023 compared with 2022. This is the third consecutive year of annual growth.

The annual increase in 2023 was solely because of a rise in repair and maintenance, which rose 8.3%, as new work decreased 2.1%.

At the sector level, seven of the nine sectors saw an increase in annual growth in 2023. Non-housing repair and maintenance, and private housing repair and maintenance were the largest positive contributors. The main negative contributor to annual growth was private new housing, which saw falls in 10 out of the 12 months of 2023.

In Quarter 4 (Oct to Dec) 2023, total construction new orders decreased by 13.1% (£1,361 million) compared with Quarter 3 (July to Sept) 2023. This is the lowest level of total construction new orders (£9,007 million) since Quarter 2 (Apr to June) 2020 (£6,101 million), when coronavirus (COVID-19) lockdown restrictions were in place. More information can be found in our New orders in the construction industry dataset.

Other new work new orders (that is, non-housing) was the largest contributor to the decrease in Quarter 4 2023, decreasing by 14.7% (£1,056 million). This mainly came from private commercial new orders, which decreased by 18.1% (£542 million) and was driven by decreases in offices, agriculture, miscellaneous, and shops. The other main contributor to the decrease in other new work was private industrial new orders, which saw a decrease of 27.6% (£320 million).

Housing new orders saw a decrease of 9.5%. This came solely from private new housing which decreased by 14.4% (£402 million), as public new housing saw an increase of 23.5% (£98 million).

Within the annual series, new orders decreased 20.9% in 2023, following two periods of consecutive annual growth in 2022 and 2021.

Prices in the construction industry, as estimated by our Construction Output Price Index (OPI) dataset, increased to 3.1% in the 12-month period to December 2023. The rate of annual price growth has slowed from the record increases seen in May 2022 and June 2022 (10.7%).

Construction output estimates

Construction output estimates are monthly estimates of the amount of output chargeable to customers for building and civil engineering work done in the relevant period, excluding Value Added Tax (VAT) and payments to subcontractors.

Seasonally adjusted estimates

Seasonally adjusted estimates are derived by estimating and removing calendar effects (for example, leap years such as 2020) and seasonal effects (for example, decreased activity at Christmas because of site shutdowns) from the non-seasonally adjusted estimates.

Value estimates

The value estimates reflect the total value of work that businesses have completed over a reference month.

Volume estimates

The volume estimates are calculated by taking the value estimates and adjusting to remove the impact of price changes.

Quality and methodology

More quality and methodology information (QMI) is available in our:

• Construction output QMI

• Construction output price indices (OPIs) QMI

• New orders in construction QMI

Reasons for revisions to construction output in this release

This release contains revisions to construction output estimates from January 2023 onwards, and is consistent with the National Accounts Revisions Policy. Revisions in this release are a result of:

• revisions in the nominal data; this includes revisions to the survey data

• revisions to seasonal adjustment factors, which are re-estimated every month and reviewed annually

• revisions to the input series for the Construction Output Price Indices (OPIs)

For further information on the revisions profile, see our Output in the construction industry revisions triangle (one-month growth) dataset and ourOutput in the construction industry - revisions triangle (three-month growth) dataset.

Office for Statistics Regulation review of GDP

The Office for Statistics Regulation (OSR) have completed a review of the practices around the preparation and release of information about revisions to estimates of gross domestic product (GDP) in our Impact of Blue Book 2023 article, released on 1 September 2023. This review covered: 

• processes and quality assurance in making revisions to GDP 

• potential improvements to early estimates of GDP enabled through enhanced access to data 

• communication of revisions to GDP, the story behind the most recent set of revisions, and uncertainty in early estimates of GDP

We published a response to the OSR review into GDP in January 2024, which was positively received by the OSR.

Sub-national and sub-sector construction output

Data on new orders supplied by Barbour ABI are used to model the breakdown of the overall output figures for Great Britain into the lower level and regional data. This is shown in Tables 1 and 2 of our Output in the construction Industry: sub-national and sub-sector dataset. More detail is available in our Quality assurance of administrative data used in construction statistics methodology.

Bias adjustment

Typically, since the move to monthly GDP estimates, an adjustment to address any bias in survey responses for construction output is applied to the early construction output monthly estimates. We show this in our Improvements to construction statistics: Addressing the bias in early estimates of construction output, June 2018 article.

Response rates for December 2023 showed improvement compared with levels in recent years since the coronavirus (COVID-19) pandemic. The survey turnover response rate for December 2023 was 74.8% We have continued not to apply a bias adjustment for December 2023, while we review this approach going forward. More information on our response rates is available in our Output in the construction industry dataset.

Differences with Monthly GDP construction estimates

In Blue Book 2021, we introduced a new framework to improve how we produce volume estimates of GDP for balanced years as part of the supply use process. This was explained in our Producing an alternative approach to GDP using experimental double deflation estimates article.

This framework included the implementation of double-deflated industry-level gross value added (GVA) for the first time. This improvement was reflected in the GDP quarterly national accounts, UK: April to June 2021 bulletin and datasetand GDP monthly estimate, UK: August 2021 bulletin for the first time.

As a result, volume estimates in the monthly GDP and construction outputs releases will differ for the period 1997 to 2020. This is because the construction publication measures the volume of construction work (output), while the GDP series measures GVA (that is, output minus intermediate consumption). Construction estimates will align, but on a growth basis from January 2021 onwards.

Information and indicative effects of this change to industry-level GVA volume can be found in our Impact of double deflation on industry chain volume measure annual estimates article and our Impact of Blue Book 2021 changes on quarterly volume estimates of gross domestic product by industry article.

Publishing content review

This release is a full bulletin, following a number of headline-only releases. We are currently reviewing the content we publish and are trialling a system of a full bulletin release on quarter months, with headline-only releases on the other two months of each quarter. There will be no change to the accompanying data, and we will continue to publish all our usual datasets every month. We will announce a decision in a future release and welcome any feedback at construction.statistics@ons.gov.uk.