UK construction output rebounds in May as economy restarts, says GlobalData

Following the release of data from the Office for National Statistics (ONS) showing an improvement in construction output in May;

Moustafa Ali, Economist at GlobalData, a leading data and analytics company, offers his view:

“The improvement in construction output in May reflects the restarting of operations for most firms in the sector and is in line with GlobalData’s expectations of a recovery following the severe disruption caused by COVID-19 containment measures.

“GlobalData forecasts that construction output in the UK will contract by 10.3% in 2020 as a whole, with the steep contraction in Q2 2020 being partially offset by improvements during the second half of the year. However, there are risks to the prospect of a solid recovery in the second half, particularly concerning the potential for a second wave of infections with lockdown measures being eased across the country.

“Over the past three months, construction output fell by a record 29.8%, driven by falls in new work and repair and maintenance. However, with the easing of lockdown measures in May, and with many construction firms returning to work, May showed a large month-on-month increase in output growth driven by a record increase in new works, which grew by 11.1%. The largest increase in new works came in the infrastructure sector, which increased by 12.7%, and in private new housing, which grew by 21.4%. Despite the 8.2% increase in growth in May, output was still 39.7% lower year-on-year, revealing the extent to which COVID-19 disruption has impacted the industry.”

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