July鈥檚 strong growth in output followed the record monthly growth of 23.5% in June 2020. However, even after two months of strong rises, the collapse in activity during the early stages of the pandemic meant that construction output in July was still 11.6% behind the February 2020 level.
The growth in July 2020 is the third consecutive month of growth since the record monthly decline of 40.2% in April 2020, with then record monthly growth of 7.6% in May 2020 followed by record monthly growth of 23.5% in June 2020. July 2020 monthly growth of 17.6% is the second-largest monthly growth since monthly records began in January 2010.
In the three months to July 2020 construction output fell by 10.6%, compared with the previous three-month period, to 拢3,591m. This was driven by falls in both new work (9.7%) and repair and maintenance (12.4%).
The decrease in new work (9.7%) in the three months to July 2020 was because of falls in every new work sector, apart from infrastructure, which grew by 6.0%; the largest negative contributor was private new housing, which fell by 17.0%.
Commenting on the new construction output figures, Clive Docwra, managing director of construction consultant McBains, said: 鈥淭oday鈥檚 figures will be welcomed by the construction sector as a sign of its continuing recovery, but in reality they need to be viewed in the context of an industry that experienced a record 40% drop in output at the height of the lockdown.
鈥淐onstruction is still a long way from being out of the woods and the upturn is extremely fragile, reflected by the fact the figures show that new work decreased by 9.7% in the three months to July 2020, with private new housing work alone falling by 17.0%.
鈥淭he big concern for the industry is if there鈥檚 a second spike and a further lockdown. The government needs to do all it can to ensure the sector maintains its recovery.
鈥淥n top of this, of course, a potential no deal at the end of the Brexit transition period is making investors nervous about committing to new projects.聽 The Prime Minister may want the industry to 鈥榖uild, build, build鈥� but that鈥檚 difficult when many investors are saying 鈥榳ait, wait, wait鈥� and holding off embarking on new developments until there鈥檚 greater clarity.鈥�
Fraser Johns, finance director at construction contractor Beard, said: 鈥淚n a sense there was really only one way these figures could go starting from such a low base back at the start of Q2, when we saw a 40.2% drop in GDP. But continued growth at this rate for the third consecutive month has to be a good thing.
鈥淗owever it is interesting to note that across the sectors, and therefore the economy as a whole, the rate of recovery is not as strong as it was in June with construction growing at 17.6% compared to 23.6% previously. This is likely to be down to a number of factors but would reflect what we鈥檙e seeing on the ground.
鈥淲e face a challenging 12 months ahead based on continued uncertainty in the economy, and the affect this is having on getting project decisions over the line. So while it鈥檚 welcome to see overall GDP grow by 6.6%, a return back to pre-pandemic levels simply cannot come quickly enough.鈥�
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