Construction output in Great Britain: November 2022

• Monthly construction output is estimated to have flat growth (0.0%) in volume terms in November 2022; this follows a downwardly revised increase of 0.4% in October 2022.

• The flat growth in monthly construction output in November 2022 came from a decrease in new work (0.4% fall), offset by an increase in repair and maintenance (0.6%) on the month. 

• At the sector level, the main positive contributors to the flat growth were seen in infrastructure new work and non-housing repair and maintenance, which increased 4.2% and 2.4%, respectively; the main negative contributors were seen in private new housing and private housing repair and maintenance, falling 4.8% and 1.7%, respectively.

• The level of construction output volume in November 2022 was 3.1% (£452 million) above the February 2020 pre-coronavirus (COVID-19) pandemic level; new work was 3.4% (£327 million) below its February 2020 level, while repair and maintenance work was 15.5% (£778 million) above the February 2020 level.

• Construction output saw an increase of 0.3% in the three months to November 2022; the increase came solely from growth in new work (1.3%) as repair and maintenance saw a decrease (1.2% fall).

• Revisions in this release are seen back to January 2021 and are consistent with the Gross domestic product (GDP) quarterly national accounts, UK: July to September 2022 bulletin, published on 22 December 2022.

Monthly construction output growth was flat (0.0%) in November 2022. This follows a downwardly revised 0.4% increase in October 2022.

Anecdotal evidence received from returns for the Monthly Business Survey for Construction and allied trades (MBS) suggested that the narrative around increased prices for certain construction products is less notable this month, with fewer businesses reporting struggles in relation to costly materials. However, more businesses are starting to further reference economic worries leading to customers delaying or cancelling work than in previous months.

To a lesser extent, additional comments mentioned heavy rainfall throughout November 2022. The Met Office confirmed in their Monthly climate summary (PDF, 363KB) that rainfall was above average and businesses cited that for the construction industry, the rain caused difficult working conditions. However, for some businesses the rainfall generated more work relating to repairs.

Detailed growth rates

Month-on-month construction output growth in November 2022

The 0.0% monthly growth in construction output in November 2022 was a mixed picture, with six out of the nine sectors seeing an increase on the month.

Private new housing and private housing repair and maintenance were the largest negative contributors to the flat growth in November 2022, decreasing 4.8%, (£172 million) and 1.7% (£41 million), respectively. The largest positive contributions were from infrastructure new work and non-housing repair and maintenance, increasing 4.2% (£87 million) and 2.4% (£68 million), respectively.

The large decrease in private new housing follows an increase of 2.3% in October 2022 (£81 million), whereby private new housing was the largest contributor to the increase to monthly growth in October 2022. Private housing repair and maintenance also showed a similar profile, following an increase of 1.4% in October 2022. Anecdotal evidence suggests a general reduction in housing work in November 2022, however, both are still above their pre-coronavirus levels (Table 1).

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

Construction output rose slightly by 0.3% (£140 million) in the three months to November 2022. This is the first increase in the three-month on three-month series since July 2022 (0.5%). However, it is important to note that the weak June 2022 (negative 1.7%), where two working days were lost because of the Queen's Platinum Jubilee, is in the base period. The increase in the three months to November 2022 came solely from a increase in new work (1.3%) as repair and maintenance decreased (negative 1.2%).

Of the nine sectors, six saw an increase in the three months to November 2022, with the largest contributors being infrastructure new work, public other new work and public housing repair and maintenance. These sectors increased 3.2% (£199 million), 4.7% (£98 million) and 4.1% (£71 million), respectively.

Estimates in this release are consistent with our Gross domestic product (GDP) quarterly national accounts, UK: July to September 2022 bulletin, published on 22 December 2022.

Revisions in this release have been incorporated back to January 2021. Alongside the revisions in the latest quarterly national accounts release, October 2022 is also open for revision in today's publication. For further information as to the reasons for these revisions, see Section 6: Measuring the data.

The revision to the annual rate of construction output growth in 2021 was minimal, revising down 0.1 percentage points to annual growth of 12.8%.

The revisions to the monthly and quarterly rate of construction output growth are larger than normal, however, are of a balanced profile. This is mainly coming from late and revised Monthly Business Survey (MBS) survey data and, to a lesser extent, changes to the seasonal adjustment specification files. 

Figure 5 shows the monthly revisions to growth of construction output in this month's release (13 January 2023) compared with last month's release (12 December 2022). Notably, June 2022 and September 2022 saw revisions of a larger magnitude than usual, with falls of 1.1% and 0.8%, respectively. These downward revisions in the latest periods also led to Quarter 3 (July to Sept) 2022 being revised down 0.8 percentage points to a quarterly fall of negative 0.2%.

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

Reasons for revisions in this release

• 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) 2022.

• Revisions because of changes to the seasonal adjustment specification: this has an impact on the quarterly and monthly path of construction output estimates.

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.

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 seen in Tables 1 and 2 of our Output in the construction industry: sub-national and sub-sector.

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.

While the response rate for November 2022 has improved and is nearing comparable pre-coronavirus levels of response, it is still below this level so we have not applied a bias adjustment for November 2022.

Differences with monthly GDP construction estimates

In Blue Book 2021, a new framework was introduced to improve how we produce volume estimates of 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 2021 quarterly national accounts and October 2021 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 2020 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 2021 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.