An update from the Bank of England on the construction sector.
Author: ross sturley cimcig
An update from the Bank of England on the construction sector.
Construction activity improved slightly in recent months but remained lower than a year ago.
Activity picked up in most areas except for commercial development, with output mostly supported by infrastructure projects. Contacts reported that public sector repair and maintenance work was holding up, and demand for household repair and maintenance work was strong. This had resulted in shortages of some materials, constraining output.
Construction of private new build housing was reported to be close to normal levels, driven in part by strong consumer demand. However, contacts said they expected demand to slow in the coming months when government support measures, such as the temporary reduction in stamp duty and the current form of the Help to Buy scheme, come to an end. And construction of social housing was weaker than for private housing due to the postponement of projects.
Contacts expressed concerns about the weak pipeline of commercial projects, such as office and retail development, which could weigh on output in 2021. There was also some concern that public projects could be delayed due to budget constraints. However, there were hopes that investment in green projects would support activity further out.