ONS published its latest construction output data but be very cautious using it as the ONS has serious issues that appear to have affected all sectors since 2022 but are most visible in private housing rm&i as previously highlighted in CPA weekly updates and forecast publications.

The ONS problems may be due to two reasons; ONS underestimating price inflation (and so overestimating output volume) plus survivor bias, due to a sharp rise in the number of insolvencies.

As a result, ONS appears to have been consistently overestimating construction output since 2022.

Construction output in a rain-affected February 2024 was 1.9% lower than in January and 2.0% lower than a year earlier but still 3.5% higher than in January 2020, pre-pandemic according to the ONS. Given the impact of the persistent rain in January and February, March and Q2 may see ‘catch-up’ activity. Although ‘catch-up’ may occur on larger sites, most smaller sites lack the capacity to ‘catch up’ and work generally just ends up being pushed back.

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