Monthly activity within the UK construction sector appears to have dipped in May, following three consecutive periods of growth.
The 0.6 per cent fall in monthly output was solely due to a 2.1 per cent decrease in Repair and Maintenance (R&M) contracts, as new work increased by 0.6 per cent.
Up until the dip in activity, the UK construction sector had experienced three consecutive months of growth, including a 0.8 per cent increase in activity in April.
Dr David Crosthwaite, chief economist at BCIS, said: “After promising signs of growth in April, which suggested that the sector might have turned a corner, the latest output figures from the ONS are once again disappointing.
“While new work output growth was in broadly positive territory, the largest declines were in repair and maintenance output which has driven growth over the last few years.
“Further, output in both public and private new housing was down on the month which should be a concern for the government given its housebuilding targets.”
By sector, output in five out of the nine sectors in construction fell in May this year.
The main contributors to the monthly decrease were non-housing R&M, and private housing R&M, which fell by 2.4 per cent and 1.8 per cent, respectively.
However, total construction output is estimated to have grown by 1.2 per cent in the three months to May, with new work up by 0.9 per cent and R&M by 1.5 per cent.
According to AECOM’s latest market forecast for Q3 2025, however, the sector is showing early signs of recovery, particularly in house building, with a forecasted 3 per cent rise in tender prices for 2025.
Despite this, the sector still faces several complex challenges.
Persistent labour shortages and rising wages have contributed to a 3.5 per cent increase in build costs, with inflationary pressures and regulatory challenges still affecting project viability.
Further, construction company insolvencies have risen by 12.6 per cent in Q1 2025, highlighting ongoing financial strain within the supply chain.
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