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Construction work exceeds pre-pandemic level by 13%

By gregory nelsonFebruary 14, 2022

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New ONS figures have shown how construction activity has overtaken its pre-pandemic level with an r-shaped rebound after output surged 12.7% last year.

The latest orders figures from the office for national statistics indicate the growth trend will continue despite material and labour price rises.

In the last three months of 2021 the figures show that total order levels jumped 9.2% on the previous three months.

With overall construction inflation running at 6.2% but timber, steel and concrete were the main driver of the inflationary rises.

The new build housing sector suffered the highest price inflation rate this is running 10%, ahead of the 5% cited by the major volume house builders much more than the other industry sectors.

R shaped recovery of construction industry

Group chief executive at procurement body Scape Mark Robinson commented saying that: “December was characteristic of a year in which the construction industry largely overcame the odds; particularly in relation to rising Omicron cases, labour and material shortages.

“But, with the final Covid restrictions set to be lifted soon, concerns around rapid and sustained inflation – furthered by soaring energy costs – have no doubt taken its place and look likely to pose a sustained threat to growth prospects in 2022.

“Mitigating the impact of these inflationary pressures will require extensive, ongoing dialogue and collaboration between clients, contractors and their supply chains – qualities that frameworks aspiring to the ‘gold standard’ must embed.

2021 compare to pre pandemic level — 2021 compared to pre pandemic level

He continued to say: “Crucially, it’s important that payments are prompt and that any increased cost burden continues to be shared, rather than passed on to the supply chain. These firms are most vulnerable to cashflow challenges, but critical to the delivery of projects.”

Private house building was also up 13% compared to pre pandemic level with most of the industry recovery is down to the strength of infrastructure, which is running 45% above the February 2020 pre-pandemic output level.

A rise in repair and maintenance activity also helped to offset a new work lag which is still down 2% on the pre-pandemic level, for the main part due to a slower recovery in private commercial activity.

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