Construction Industry Update – April 2023

Construction output rebounds 2.4% in February

Construction output returned to strong growth in February after a washout in January due to heavy rain.

Monthly construction output is estimated to have increased 2.4% in volume terms following the 1.7% fall in January, with February ranking as the highest monthly value in level terms (£15.6 bn) since records began in January 2010.

The jump in monthly construction output was driven mainly by repair and maintenance which was up to 4.5%. New work saw more modest growth on the month 1.1%.


Buyers report commercial & civil work up for second month

Construction buyers reported a slowdown in growth in March as residential work acted as a brake on industry activity.

But growth in commercial and civil engineering activity for the second month running kept the headline S&P Global/CIPS UK Construction Purchasing Managers’ Index above the crucial 50 no-change mark.

At 50.7 in March, the headline seasonally adjusted index was down from 54.6 in February, due to housing plunging to 44.2.

Delivery times from suppliers improved at the fastest rate since November 2009 as stocks were unravelled and fewer orders from supply chain managers meant goods got through more quickly.


Government urged to act to prevent fresh material cost hikes

Materials chiefs have said construction costs will rise further without and overhaul of the rules governing suppliers.

The Mineral Products Association (MPA) has demanded that the government act on 18 measures to develop the regulatory environment it insists the sector requires.

It report, Smart Regulation in the Mineral Products Sector, warned that “delay and uncertainty” is creating a “challenging environment for private investment” in material extraction.

For every 100 tonnes of sand and gravel sold during the decade to 2020, the industry only gained permission to extract another 63 tonnes of the material, the study said. With demand soaring, reform is required “to enable mineral reserves to transition back to a long-term sustainable footing”.


Government scraps smart motorways programme

The Government has finally abandoned the Smart motorway programme after 16 months under review.

Eleven projects already paused and three more earmarked for construction during the third Road Investment Strategy (2025 to 2030) will be removed from government road-building plans.

Announcing the decision over the weekend the department of Transport blamed financial pressures and the current lack of public confidence about safe operations of Smart motorway recovery systems.

While no new stretches of road will be converted into smart motorways, the M56 J6-8 and M6 J21a-26 will be completed given they are already over three-quarters constructed.



Construction output rebounds 2.4% in February | Construction Enquirer News

Buyers report commercial and civils work up for second month | Construction Enquirer News

Government urged to act to prevent fresh material cost hikes | Construction News

Government scraps Smart motorways programme | Construction Enquirer News