Construction output in Great Britain: May 2022

• Monthly construction output increased by 1.5% in volume terms in May 2022; this is the seventh consecutive monthly growth following the upwardly revised increase to 0.3% in April 2022; May 2022 is a record high in monthly-level terms (£15,053 million) since records began in January 2010.

• The increase in monthly construction output in May 2022 came solely from an increase in new work (2.8%) as repair and maintenance saw a slight decline, decreasing 0.4% on the month. 

• At the sector level, the main contributors to the increase seen in May 2022 were private commercial new work and private new housing, which increased by 12.1% and 7.2% respectively.

• The level of construction output in May 2022 was 4.1% (£598 million) above the February 2020 pre-coronavirus (COVID-19) pandemic level; new work was slightly below (£3 million) the February 2020 level, while repair and maintenance work was above (£601 million) the February 2020 level.

• The recovery to date, since the falls at the start of the coronavirus pandemic, is mixed at a sector level, with infrastructure 19.0% (£356 million) above and private commercial 21.2% (£524 million) below their respective February 2020 levels in May 2022.

• Alongside the monthly increase, construction output increased by 3.0% in the three months to May 2022, with increases seen in both new work, and repair and maintenance (2.4% and 4.1% respectively); this is the seventh consecutive growth in the three-month on three-month series, and the largest growth seen since June 2021 (4.0%).

• Revisions in this release are seen back to January 2022 and are consistent with the GDP quarterly national accounts, UK: January to March 2022 bulletin, published on 30 June 2022

Monthly construction output increased by 1.5% in volume terms in May 2022. This is the seventh consecutive monthly growth following the upwardly revised increase (0.7 percentage points) to 0.3% in April 2022. May 2022 is a record high in terms of monthly levels (£15,053 million), since records began in January 2010.

Anecdotal evidence from both returns received for the Monthly Business Survey for Construction and allied trades and the Business Insights and Conditions Survey (BICS) dataset highlights the continual issues in sourcing certain construction products. High costs for products such as concrete, bricks and timber are still mentioned. There are also ongoing shortages of many materials, particularly for the smaller sized firms. Also, significant mentions of higher fuel costs and VAT tax increases for red diesel have had an impact this month.

Despite these challenges, order books continued to remain strong, as shown in the recent Quarter 1 (Jan to Mar) 2022 New orders in the construction industry dataset. In Quarter 1 2022, total new orders were 13.7% above their Quarter 4 (Oct to Dec) 2019 level. This was the last full quarter not affected by coronavirus, and all six sectors were above their pre-coronavirus level in Quarter 1 2022.

Detailed growth rates

Private industrial new work has seen growth in May 2022 and continues to be strong when compared with measures in the previous year. This has come from a rise in warehouses and distribution centres. This is shown further in the new orders data, with warehouses showing an increase that is likely linked to the change in consumers' shopping habits over the coronavirus pandemic. Specifically, this is because of more online spending. More detail is available in our article that explains the golden logistics triangle.

Month-on-month construction output growth in May 2022

The 1.5% rise in construction output in May 2022 represents an increase of £229 million in monetary terms compared with April 2022. Four out of the nine sectors saw an increase.

Private housing new work and private commercial new work were the largest contributions to the monthly increase in May 2022, increasing by 7.2% (£235 million) and 12.1% (£211 million) respectively. The increase seen in private commercial new work comes after a large monthly decrease of 7.0% in April 2022.

Continued anecdotal evidence from businesses that has been gathered over recent months suggests that the increase in private commercial comes from a rise in offices. This is further shown in the new orders data (up 38% in Quarter 1 2022), which is probably linked to office space refurbishments increasing, as employees have been returning to offices.

The increase in turnover is also backed by the latest data from the BICS in the latest waves for construction firms. For the period 1 March 2022 to 31 May 2022, businesses were asked how their turnover in the current month compares with the previous calendar month. There was a rise in the proportion of firms reporting an increase in May 2022 (up to 11% from 8%).

Three-month on three-month construction output growth in May 2022

Construction output rose by 3.0% (£1,307 million) in the three months to May 2022. This is the seventh consecutive increase in the three-month on three-month series. Increases in both new work, and repair and maintenance (2.4% and 4.1% respectively) contributed to the growth, with seven out of the nine sectors seeing an increase.

All repair and maintenance sectors have shown positive growth in the three months to May 2022. As this covers the months March to May 2022, anecdotal evidence gathered over March 2022 suggests that the increase in the repair and maintenance sectors was because businesses had a higher workload in March 2022. This was because of the repair work derived from the storms seen in late February 2022. In these data, February 2022 moves into the comparison period for the first time.

Estimates in this bulletin are consistent with our GDP quarterly national accounts, UK: January to March 2022 bulletin, published on 30 June 2022. Revisions are seen back to January 2022.

Quarter 1 (Jan to Mar) 2022 is revised to have now grown by 2.2% with a downward revision of 1.6 percentage points. January 2022, which has now increased by 0.5% (down 1.6 percentage points), is the main contributor to the fall in the quarter. This revision is coming from late and revised survey data, which is partly on account of the lower response levels seen in early estimates.

Construction output estimates

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

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

Reflect the total value of work that businesses have completed over a reference month.

Volume estimates

Calculated by taking the value estimates and adjusting to remove the impact of price changes.

Quality and methodology

More quality and methodology information is available in our:

• Construction output QMI

• Construction output price indices QMI

Sub-national and sub-sector 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. These data can be seen in Tables 1 and 2 of our Construction output: sub-national and sub-sector dataset.

Revision to construction output

Reasons for the revisions in this release include:

• revisions in the nominal data; this includes late and revised 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

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

Accessibility of construction output datasets

We have been reviewing new accessibility of datasets legislation and have now updated all datasets related to this bulletin. If anyone has any feedback on the new layout, please email us at construction.statistics@ons.gov.uk

Consultation on release practices

The Office for Statistics Regulation has finalised its consultation on release practices. The Office for National Statistics (ONS) has welcomed the findings, specifically noting that the release-time exemptions, which were granted during the coronavirus pandemic, are now incorporated into the revised Code of Practice. As such, the output in the construction industry will continue to be published at 7am.

Bias adjustment

Typically, since the move to monthly gross domestic product (GDP) estimates, an adjustment to address any bias in survey responses for construction output is applied to the early construction output monthly estimates.

The response rate for May 2022 is slightly lower (70.0% turnover response) compared with a normal turnover response of approximately 79% for this month in the year before the coronavirus pandemic. Therefore, no comparable historical data are available at the time of the first estimate for a reference month, so we have not applied a bias adjustment for May 2022.

Blue Book 2021

In Blue Book 2021, there was a new framework to improve how we produce volume estimates of gross domestic product (GDP) for balanced years as part of the supply use process. 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 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 2019. This is because the construction publication measures the volume of construction work (output), while the GDP series measures GVA (output minus intermediate consumption). Construction estimates will align, however, from January 2020 onwards on a growth basis.

Articles on the impact of double deflation and Blue Book changes provide information and indicative effects of this change to industry-level GVA volume.