Construction output in Great Britain: November 2019

• Construction output increased by 1.1% in the three months to November 2019, compared with the previous three-month period; this was driven mostly by 1.6% growth in new work, with a smaller contribution from 0.2% growth in repair and maintenance.

• The rise in new work in the three months to November 2019 was because of growth in all sectors apart from private housing new work, which fell 0.4%; the largest positive contribution came from infrastructure and private commercial, which grew by 3.0% and 1.8% respectively.

• In repair and maintenance, the rise in the three months to November 2019 was largely because of the 1.2% increase in non-housing repair and maintenance, with public housing repair and maintenance growing 2.5%; in comparison, private housing repair and maintenance fell by 1.9%.

• Construction output increased by 1.9% in the month-on-month all work series in November 2019; this was primarily driven by 2.4% growth in new work and, to a lesser extent, 0.9% growth in repair and maintenance.

Monthly construction output increased by 1.9% in November 2019, partially recovering from the 2.2% fall in October 2019. The 1.9% increase in November 2019 is the largest monthly growth since January 2019, when it grew 2.4%.

It should be noted that for October 2019 we received some anecdotal information from a number of survey respondents who had been affected by adverse weather. Although it is difficult to quantify the exact impact on the industry, output in November 2019 has partially recovered following this.

November 2019 growth was driven predominantly by 2.4% growth in new work, with a smaller contribution of 0.9% growth in repair and maintenance.

Over the longer term, since the start of 2017, the industry has experienced a slight upward trend in growth in the all work series. However, this is markedly slower growth than the period prior to 2017.

Figure 1 shows the monthly and quarterly indexed chained volume measure, seasonally adjusted series. The quarterly series provides a smoother and more comprehensive view of trends within the construction industry rather than the more volatile monthly series.

Contributions to growth

Construction output can be broken down by different types of work. These are categorised into all new work and repair and maintenance, as shown in Figure 2. All new work accounts for approximately two-thirds of all work, while repair and maintenance accounts for approximately one-third of all work.

Figure 3 shows the difference in the three-month on three-month growth from the different construction sectors, taken from our seasonally adjusted, chained volume measure series. Construction output increased by 1.1% (£461 million) in the three-months to November 2019, compared with the previous three-months.

New work rose by 1.6% (£427 million) in November 2019, with notable increases in infrastructure and private commercial new work, which increased by 3.0% (£163 million) and 1.8% (£128 million) respectively. Private commercial new work has seen a recovery since April 2019 following 18 consecutive periods of decline between June 2017 and November 2018.

Private housing was the only sector within new work to see a fall in construction output in the three months to November 2019, compared with the previous three months, decreasing by 0.4% (£34 million).

Repair and maintenance grew by 0.2% (£35 million) in the three months to November 2019, compared with the previous three months. The increase in repair and maintenance was driven by increases in non-housing repair and maintenance and public housing repair and maintenance of 1.2% (£84 million) and 2.5% (£47 million) respectively.

Like in new work, the only sector to see a fall was private housing, with private housing repair and maintenance decreasing by 1.9% (£97 million).

Figure 4 shows the month-on-month growth for November 2019 for the different construction sectors, taken from our seasonally adjusted, chained volume measure series. Construction output increased by 1.9% (£253 million) in November 2019, which is the largest month-on-month increase since January 2019, when it grew by 2.4% (£320 million).

New work in the month-on-month series rose by 2.4% (£214 million) in November 2019, partially recovering from the 3.2% (£298 million) fall in October 2019. All sectors went from negative growth in October 2019 to positive growth in November 2019, apart from public new housing, where growth slowed from 4.4% to 1.0%, and infrastructure, which went from growth of negative 6.0% to negative 0.4%.

Much of the monthly increase in November 2019 came from private housing new work, which rose by 4.6% (£135 million). Similar to all work and new work, the increase in month-on-month growth for private new housing in November 2019 follows a fall of 4.9% (£150 million) in October 2019.

In contrast to this monthly increase in November 2019, the three-month on three-month series shows a decrease of 0.4% (£34 million), as illustrated in Figure 5. The only sector in new work to experience a fall in the month-on-month series was infrastructure, which fell by 0.4% (£8 million).

Repair and maintenance also saw an increase in November 2019 in the month-on-month series, rising by 0.9% (£40 million). While non-housing and public housing repair and maintenance rose by 3.1% (£71 million) and 1.9% (£12 million) respectively, private housing repair and maintenance fell by 2.6% (£44 million).

In the month-on-year series, public new housing continues its recent strong performance, growing by 20.1% (£98 million), as illustrated in Figure 6. Despite it having a relatively small size in comparison to other sectors, this continues to be one of the largest contributors along with non-housing repair and maintenance, which grew by 4.5% (£103 million).

The largest positive drivers in new work in the three-month on a year earlier series were public new housing, private commercial and infrastructure, which grew by 18.4% (£269 million), 3.2% (£228 million) and 4.0% (£126 million) respectively. Public other new work was the only sector to fall, declining by 4.7% (£116 million) in the three-month on three-month a year earlier series.

The fall in repair and maintenance in this series was mostly driven by the 3.9% (£200 million) fall in private housing repair and maintenance. Figure 7 shows the weak growth in private housing repair and maintenance since mid-2018, particularly in the second half of 2019, with growth substantially lower than it was prior to 2018. It should also be noted the increase seen in February 2019 to April 2019 is when the three-month on three-month a year earlier series contained February 2018 and March 2018 in the base period, which experienced adverse weather conditions.

This is the first monthly release to incorporate the revisions made in the GDP quarterly national accounts, UK: July to September 2019 release, published on 20 December 2019. As a result, revisions have been made back to January 2018.

Details of why revisions can be seen across the whole period are available in the Measuring the data section.

In addition to the revisions to construction output first published within GDP quarterly national accounts, UK: July to September 2019, this publication also includes revisions to the October 2019 construction output estimates first published in Construction output in Great Britain: October 2019 and new orders July to September 2019 on 10 December 2019. These revisions are solely because of late and revised survey returns.

For further information on the revisions profile please see the output in the construction industry revisions triangles published on a one-month and three-month growth basis.

Data collection

Our monthly Construction Output Survey measures output from the construction industry in Great Britain. It samples 8,000 businesses, with all businesses employing over 100 people or with an annual turnover of more than £60 million receiving a questionnaire by post every month. The survey’s results are used to produce non-seasonally and seasonally adjusted monthly, quarterly and annual estimates of output in the construction industry at current price and at chained volume measures (removing the effect of changes in price).

Data on new orders supplied by Barbour ABI are used to model the breakdown of the overall output figures for Great Britain into the sub-sector and sub-national data seen in Tables 1 and 2 of Construction output: sub-national and sub-sector. Please note that this dataset is not designated as a National Statistic.

Revisions

Revisions in the release can be seen as a result of:

• late responses to surveys replacing imputations, or revisions to original returns

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

• HM Revenue and Customs (HMRC) Value Added Tax (VAT) returns replacing Monthly Business Survey (MBS) data for small- and medium-sized businesses for Quarter 2 (April to June) 2019 for the first time as well as potential revisions to previous VAT turnover data

• revisions to the input series for the construction output price indices

Quality and methodology

More quality and methodology information on strengths, limitations, appropriate uses, and how the data were created is available in the Construction output QMI and New orders in construction QMI.

Value Added Tax (VAT) data

Alongside the MBS, further information on output is gained from VAT turnover data, which are used to replace survey data for small- and medium-sized businesses. However, because of the delay in companies making VAT returns, these data are only taken on after a lag period. Currently, VAT turnover data are used for the period Quarter 1 (Jan to Mar) 2016 to Quarter 2 2019.

Further information on the use of VAT turnover in construction output estimates and its impact can be found in the following articles:

• VAT turnover implementation into national accounts

• VAT turnover data in national accounts: background and methodology

• Quality assurance of administrative data (QAAD) report for VAT turnover data

Data quality

Construction output is an important economic indicator and is also therefore used in the compilation of the output measure of gross domestic product (GDP). These estimates are widely used by private and public sector institutions, particularly by the Bank of England and HM Treasury, to assist in informed decision-making and policy-making.

National Statistics status

Great Britain construction output statistics and construction new orders are designated as National Statistics, in accordance with the Statistics and Registration Service Act 2007 and signifying compliance with the Code of Practice for Statistics. A letter concerning the re-designation is available. This National Statistics re-designation did not include the Output in the construction industry: sub-national and sub-sector dataset.

Comparability

Output in the construction industry follows the Eurostat short-term business statistics (STS) regulation for production in construction. Headline volume estimates of construction output are assessed against Eurostat’s handbook on price and volume measures in national accounts. Before any comparisons are made with the Euro area or EU28, it is worth noting that the UK is the only member state to follow the A method for compiling production in construction statistics.

Construction output data used within this release are also used in the compilation of the GDP monthly estimate. While monthly data are available in the output in the construction industry back to January 2010, a longer time series can be obtained in the monthly GDP datasets.

Within this publication, a monthly, all work chained volume measure, seasonally adjusted series can be obtained back to January 1997 in index form to four decimal places. This can be found in the following datasets: Monthly GDP and main sectors to four decimal places and Monthly gross domestic product: time series.

Construction statistics recent development work and analysis

Information on recent construction statistics development work and analysis can be found by following these links:

• Comparing ONS’s economic data with IHS Markit and CIPS Purchasing Managers’ Index surveys (published 21 October 2019)

• Conceptual and methodological differences between private housing construction output and gross fixed capital formation private sector dwellings (published 31 May 2019)

• Construction statistics development: improving the understanding of new orders in the construction industry and the gap between output and new orders (published 30 October 2018)

Further articles on other construction statistics development work and analysis are available.