Construction output falters amid first drop since April

Construction output fell by 2.9% in December 2020 – its first decline since April – according to the latest official figures.

Declines in both new work (3.8%) and repair and maintenance (1.5%) dragged output down in December. It was the first month to see a drop following a seven-month rally after a record 40.7% fall in output in April 2020 during the first coronavirus lockdown.

But quarterly construction output grew by 4.6% in the fourth quarter of 2020, compared to the third quarter, driven by quarterly growth in both new work (4% and repair and maintenance (5.5%).

The December 2020 level of output stood at 3.5% below the pre-pandemic February 2020 level.

During the whole of 2020, all work fell by 12.% as compared to 2019, marking the latest decline in annual growth since 2009, when output fell 13.2%.

Commenting on the figures, Eddie Tuttle, director of policy, external affairs and research at CIOB, said: “The fall in construction output in December, highlighted in the latest ONS figures, shows that the construction industry is still vulnerable to the economic impacts of the covid-19 pandemic. While the industry has rebounded since the first national lockdown last year, growth is beginning to slow. The government has been clear that the construction industry has a key role to play in supporting the UK economy to weather the storm, however we are worried that forthcoming measures will impede the industry’s ability to help ‘build back better’. CIOB is encouraging the government to consider extending the Stamp Duty Land Tax holiday, and to immediately withdraw the VAT reverse charge, to support fragile businesses through this incredibly challenging time.”

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