In Q2 2023, there was a 0.3 percent growth in construction output compared to the previous quarter. This growth was attributed to a 0.9 percent increase in repair and maintenance (R&M) output. Conversely, there was a slight decrease of 0.1 percent in new work during the same period. This combination of trends reflects the dynamics within the construction industry, where R&M activities have been experiencing stronger growth compared to new construction projects since the outbreak of COVID-19.

At a sectoral level, infrastructure new work output expanded by 6.1 percent. Other growth areas were non-housing R&M, up by 2.7 percent, and other public new work, by 2.4 percent. In contrast, the private commercial new work output contracted by 3.4 percent. Private new housing and private R&M also performed poorly, both falling by 3.3 percent and 1.3 percent, respectively.

A combination of Brexit, the impact of the pandemic, the conflict in Ukraine, Bank Rate at a fifteen-year high to combat surging inflation and heightened economic and political uncertainty has hampered the momentum of investment in new projects and dampened investor sentiment. Amidst these complexities, the trajectory of sectoral construction output growth and recovery has been characterised by a blend of outcomes.

The infrastructure sector is sustaining its momentum, benefiting from a robust pipeline of ongoing projects, albeit with some rescheduling, particularly evident in the rail and road subsectors. The private housing sector, in contrast, is encountering reduced activity in both new work and R&M, due to the surge in borrowing costs and high inflation.