Following the release of data from the Office for National Statistics (ONS) showing acceleration in construction output growth in November, Moustafa Ali, Economist at GlobalData, a leading data and analytics company, offers his view on the outlook for the UK construction industry:
“UK construction output continued its recovery in November, but GlobalData holds its estimate that output for the year, as a whole, will contract at its fastest ever rate of 15.1%. The output increase of 1.9% month on month in November 2020 was higher than the market consensus forecast of 0.5%, and faster than the monthly October growth figure of 1.5%. Despite the new lockdown measures imposed in November and Brexit uncertainty, the industry continued its recovery.
“The construction industry was the best performing in November 2020 and outperformed the wider economy, which contracted by 2.6%. While the slowdown will likely translate into sluggish activity for December 2020, the outlook is positive for the industry in 2021. Vaccine rollout coupled with the government’s plans to accelerate investments infrastructure and housing will support industry growth in 2021. GlobalData expects output to increase by 6.8% in 2021.
“With the strong recovery seen over the last seven months, construction output was 0.6% above the pre-COVID peak in February, with growth strongest in repair and maintenance works, which was 7.4% above its pre-COVID peak. Overall, construction output was down 1.4% on a yearly basis in November 2020.”