Warnings that longer stagnation of wider economy could impact investment
Construction output fell 0.2% in January, mirroring the decline seen the month prior.
The rate of decline actually outstripped contraction in the economy as a whole, with UK-wide output falling 0.1% in the month.
The drop in output came solely from a 0.7% fall in new work, with repair and maintenance growing 0.4%, according to the Office for National Statistics.
Survey data from the UK鈥檚 statistical body showed adverse weather had negatively impacted output in the month.
Despite the aggregate fall, only three out of nine sectors contracted in January, with the biggest falls seen in private commercial new work (-6.1%), and private housing new work (-1.8%).
In the three months to January, output actually rose by 0.4% due a strong November performance.
Commenting on the figures, Lauren Pamma, head of energy and infrastructure at Aldermore Bank, said the outlook for the year ahead was 鈥渦nclear鈥� due to changes in the geopolitical landscape and uncertainty around cross-border tariffs.
鈥淭hese could disrupt supply chains moving forwards, and countries avoiding US tariffs by reallocating goods to other markets could negatively impact competing British goods in these markets,鈥� she said, citing research which found that nearly seven in 10 construction SMEs had experienced supply chain delays over the past 12 months.
鈥淭he Government鈥檚 proposals for streamlining planning processes for new infrastructure projects and commitment to increasing housebuilding targets should benefit the industry, and there are signs that this year may be better than 2024, but it鈥檒l take time to build up to continued growth,鈥� she added.
Clive Docwra, managing director of property and construction consultancy McBains, said the dip in output 鈥渟erves as a warning that confidence among some developers remains fragile鈥� and that any longer term stagnation in the wider economy risked having an impact on investor uncertainty.
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