Construction was the best performing economic sector in November, new figures from the Office for National Statistics (ONS) have revealed.
While the wider economy grew by 0.1 per cent in the month, construction output rose by 0.4 per cent, the statistics body said.
Construction’s growth was driven by private commercial new work, which grew by 3.1 per cent, and non-housing repair and maintenance jobs, which rose by 1.1 per cent.
The ONS added that new work drove a 0.2 per cent rise in construction output for the three months to November 2024. Growth in the economy as a whole was flat in the same period.
Bloom Building Consultancy director Gareth Belsham said demand for office space had driven much of construction’s growth but pointed out that the sector still has many underlying problems.
He said: “For all the surface sheen, the official data is far from a clean bill of health. Fortunes within the construction industry are diverging rapidly.
“Private sector housebuilders built 1.2 per cent less in November than they did in October, and new home construction as a whole is stuck in reverse.
“On the other side of the coin, commercial projects are booming on the back of rising demand for office space as employers seek to get more of their staff back into offices full time.”
He said the rise in commercial construction in the month was partly due to developers starting previously paused investment plans.
Belsham added that the outlook for housebuilding remains tough as high interest rates are keeping costs of buying land high.
The data was released a day after the ONS said inflation fell for the first time in three months in December, by 0.1 percentage points to 2.5 per cent.
Richard Cook, senior economics director at consultancy Pegasus Group, said: “Coming hot on the heels of a reported drop in inflation, the news this morning that the UK’s construction output has increased is another positive bellwether for the UK economy.
“Following last month’s decline in output, the UK desperately needed to see growth in construction activity, and while one month’s worth of data is certainly not a trend, let’s hope it marks the start of one.”
But he added that skills shortages could continue to hamstring the sector, and he hoped government plans to help economically inactive people into the workplace can boost the construction industry.
Aecom head of programme, project and cost management Scott Motley said: “These figures reflect the immediate aftermath of the Budget, so it’s positive to see that construction activity picked back up quickly following a period of planning hiatus.
“Further challenges have since developed though. Even prior to recent changes in government borrowing costs, which will impact the Treasury’s ability to fund the commitments made in the Budget, forecast demand suggests any growth in 2025 will be subdued.”
He added: “As we await a tempering in the financial markets, recent volatility is a fresh reminder of the need for the property industry to bridge the gap between public and private sector if we are to breed confidence in proposals and inward investment.”
