Weekly Economic and Construction Update – 12 May 2023
Construction output volume in March 2023 was 0.2% higher than in February, 4.1% higher than a year ago and 6.6% higher than in January 2020, pre-pandemic, according to the Office for National Statistics (ONS).
However, there still appear to be issues with ONS’s estimation of price inflation (that it uses to turn value of construction output into volume) for repair and maintenance. The ONS appears to be underestimating inflation and, consequently, overestimating volume of r&m output. The ONS reported that r&m price inflation peaked at 7.2% in May 2022 whilst firms in the sector (small contractors and merchants) report to the CPA that r&m inflation was more than double this, which implies r&m volume of output is lower than the ONS states.