Construction output in Great Britain: November 2021

• Monthly construction output increased by 3.5% in volume terms in November 2021, which is the largest monthly rise seen in construction output growth since March 2021; anecdotal evidence from survey returns suggested the strong demand for work, in combination with supply chain bottlenecks for certain products easing and the unseasonal mild and dry weather were the main reasons for the increase.

• The increase in monthly construction output in November 2021 came solely from an increase in new work (5.7%) as repair and maintenance saw a slight decline  of 0.2% on the month. 

• Because of the strong November 2021 monthly growth and minimal revisions to previous months, the level of construction output in November 2021 was 1.3% (£197 million) above the February 2020 pre-coronavirus (COVID-19) pandemic level; although new work was 1.6% (£148 million) below the February 2020 level, repair and maintenance work was 6.9% (£345 million) above the February 2020 level.

• The recovery to date, since the falls at the start of the pandemic, is mixed at a sector level, with infrastructure 49.3% (£923 million) above and private commercial 28.0% (£698 million) below their respective February 2020 levels in November 2021.

• Alongside the monthly increase, construction output rose 1.6% in the three months to November 2021, the first three-monthly increase since July 2021, with similar increases seen in both new work, and repair and maintenance (1.5% and 1.6% respectively).

Monthly construction output increased 3.5% in volume terms in November 2021 compared with October 2021, to £14,676 million. This is the highest level of construction output since September 2019.

Anecdotal evidence received from businesses responding to the Monthly Business Survey for Construction and Allied Trades (MBS) and the Business Insights and Conditions Survey (BICS) suggested that supply chain issues experienced over recent months had eased somewhat as businesses were able to obtain materials to complete and start projects.

Alongside this, the unseasonal dry and mild weather (PDF, 105KB) seen in November 2021 ensured that construction sites did not lose many working days across the month.

It should also be noted that prices of construction materials continue to be high, however, the rate of growth has eased a little in comparison with previous months.

Month-on-month construction output growth in November 2021

The 3.5% rise in construction output in November 2021 represents a rise of £496 million in monetary terms compared with October 2021, with eight out of the nine sectors seeing an increase.

Infrastructure new work and private housing new work were the largest contributors to the monthly rise in November 2021, increasing by 11.4% (£286 million) and 5.5% (£160 million) respectively. Infrastructure new work last saw stronger monthly growth in May 2020 (21.4%) with anecdotal evidence suggesting renewable energy projects along with road and rail developments are contributing significantly to the large increase in this type of work over the last 18 months.

Private housing repair and maintenance was the only sector to have fallen in November 2021, decreasing by 2.4% (£49 million).

To illustrate how supply chains have eased in the industry in November 2021 Table 3 shows how businesses' intra-UK supply chains had been affected in November 2021 from the Business Insights and Conditions Survey (BICS).

In November 2021, 26% of construction businesses reported they had to change suppliers or were unable to source materials, goods or services needed from within the UK. While still higher than the proportion for all industries sampled in the BICS (17%), the percentage for construction businesses has seen a notable drop from 35%, in late October.

Construction businesses reporting no disruptions to intra-UK procurement increased by 5 percentage points in the latest survey wave. The improvements in the supply chain coupled with stronger demand, which is backed by an increase in new orders (specifically in the first half of 2021), are likely factors to explain the strong monthly growth in output in November 2021.

Three-month on three-month construction output growth in November 2021

Construction output rose 1.6% (£671 million) in the three months to November 2021, this is the first three-monthly rise since July 2021. Similar increases in both new work, and repair and maintenance (1.5% and 1.6% respectively) contributed to the growth.

Infrastructure new work and private housing new work made the largest contributions to the three-monthly rise, increasing by 3.6% (£273 million) and 1.8% (£164 million) respectively.

Private commercial new work and public housing new work were the only two sectors to have seen falls in the three months to November 2021, decreasing by 3.2% (£176 million) and 7.5% (£94 million) respectively.

Estimates in this release are consistent with the GDP quarterly national accounts, UK: July to September 2021 on 22 December 2021.

Revisions in this release have been incorporated back to January 2020. Reasons for the revisions include:

• revisions in the nominal data; this includes revisions to both the survey data and Value Added Tax (VAT) turnover data 

• this release is also the first monthly release in which, where selected, VAT turnover data have been used for Quarter 2 (Apr to June) 2021 to replace 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

The 2020 annual rate of construction output growth has been revised up slightly to a fall of 14.9% from the previous estimate of a 15.0% fall, with minimal revisions seen to both the quarterly and monthly path (Figure 6).

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 is available in:

• 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 seen in Tables 1 and 2 of Construction output: sub-national and sub-sector.

Response rates

The response rate by turnover for the construction industries for November 2021 was 71.2%, with the data collection period covering Christmas and the New Year. This is likely to explain the slight decrease compared with recent months in terms of response, however, it is up slightly on the 70.2% turnover response in November 2020.

Bias adjustment

Typically, an adjustment to address any bias in survey responses for construction output is applied to the early construction output monthly estimates. See Improvements to construction statistics: Addressing the bias in early estimates of construction output, June 2018 published on 4 June 2018. The bias adjustment methodology is based on historical data. As the response rate for November 2021 is slightly lower, 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 November 2021.

Blue Book 2021

In Blue Book 2021, a new framework was introduced 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 September quarterly national accounts and October monthly GDP estimates 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 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, 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.

Economic statistics governance after EU exit

Following the UK's exit from the EU, new governance arrangements are being put in place that will support the adoption and implementation of high-quality standards for UK economic statistics. These governance arrangements will promote international comparability and add to the credibility and independence of the UK's statistical system.

At the centre of this new governance framework will be the new National Statistician's Committee for Advice on Standards for Economic Statistics (NSCASE). NSCASE will support the UK by ensuring its processes for influencing and adopting international statistical standards are world leading. The advice NSCASE provides to the National Statistician will span the full range of domains in economic statistics, including the national accounts, fiscal statistics, prices, trade and the balance of payments and labour market statistics.

Data quality

These estimates are widely used by private and public sector institutions to assist in informed decision-making and policymaking.

Further information on Uncertainty and how we measure it for our surveys is available.

Comparability

While monthly data are available for output in the construction industry back to January 2010, a longer time series back to 1997 can be obtained in the Monthly GDP datasets.

Monthly data prior to 2010 are derived using statistical methods from the available quarterly construction output data and should therefore be treated with some caution.