construction output & orders report 2013 q3

An overview of what happened to GB

construction output from 2007 to 2013 Q3

Published in December 2013

Leading Edge Management Consultancy Limited

Copyright information

� Copyright © Leading Edge Management Consultancy Limited 2013. All rights reserved.

� Published by Leading Edge Management Consultancy Limited, Marlborough House, High Street, Hartley Wintney, Hampshire, RG27 8NY

� Tel: 01252 279990

Contents

1. Executive summary

2. Quarterly output by main construction sector (GB)

3. Quarterly output in the private sector (GB)

4. Quarterly output in the public sector (GB)

5. Regional overview

6. Construction output forecast

7. Public & private sector output comparisons (GB)

Data source

� This report analyses new build work and excludes all repair and maintenance output figures, except where noted

� The data is drawn from the Office of National Statistics; all output and order figures are in current prices £m

� The data shown for each quarter is on a rolling 12-month basis

� The 2013 Q3 output and orders figures were released on the 13th December 2013

1. Executive summary

Executive summary Commentary on the 2013 Q3 output & order figures

New output

� Total new construction output in current prices was £73,382m in the rolling 12 months to Q3 2013. This is up 2.4% quarter on quarter and by 0.9% year on year

� However, output is still 13.3% down when compared with the peak of £84,631m in the 12 months to Q2 2008

� Output in all sectors, apart from private industrial, grew quarter on quarter in the rolling 12 months to Q3 2013, with the private housing sector the best performer

New orders

� Total construction new orders grew by 4.9% quarter on quarter to £54,615m in the 12 months to Q3 2013. The figure was up 19.7% year on year

� Year on year all sectors recorded double digit growth, with the largest increase in the public housing sector with orders up 61.5%. Private housing also recorded a significant increase of 32.1%

� Despite an upturn in total new orders, the latest figure is 28.2% lower than Q4 2007’s peak of £76,078m. This highlights the low base the industry is growing from

Outlook

� There is more optimism for all sectors compared with 12 months ago. In particular, the prospects for 2014 look good for the public and private housing and infrastructure sectors

� The recent return to growth of the largest sector, private commercial, is encouraging and should help to boost total output. Also, the end of the year on year declines in the public non-housing sector are expected by the end of 2014.

Executive summary New construction output rose by 2.4% quarter on quarter in the rolling 12 months to Q3 2013 and was up by 0.9% year on year. New orders grew by 4.9% quarter on quarter, rising by 19.7% over the year

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

50,000

55,000

60,000

65,000

70,000

75,000

80,000

85,000

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

2007 2008 2009 2010 2011 2012 2013

Rolling 12 months construction output & orders £m

(current prices)

Output Orders

Source: Office of National Statistics (ONS) data for all new work

2. Quarterly output by main construction sector (GB)

Total new construction output - £mOutput reached £73,382 over the four quarters to Q3 2013, but remains 13.3% below the peak in Q2 2008

Source: ONS


Public Housing 3,046 3,224 3,365 3,480 3,469 3,428 3,390 3,299 3,167 3,070 3,110 3,326 3,665 4,132 4,569 4,893 5,063 5,140 5,042 4,927 4,695 4,398 4,201 4,032 3,923 4,008 4,097

Private Housing 22,105 22,316 22,343 22,146 21,719 20,939 19,758 18,139 16,240 14,580 13,225 12,591 12,332 12,972 13,937 14,839 15,472 15,917 16,193 16,402 16,612 16,495 16,218 16,254 16,120 16,621 17,378

Infrastructure 8,085 8,188 8,389 8,642 8,985 9,356 9,676 9,715 9,685 9,758 9,931 10,738 11,730 12,787 13,493 13,540 13,697 14,098 14,540 15,327 15,159 14,425 14,206 14,129 14,354 14,788 14,906

Public non-housing 8,006 8,039 8,163 8,347 8,676 9,068 9,534 9,988 10,276 10,658 11,151 11,857 12,539 13,338 14,037 14,372 14,463 14,217 13,903 13,306 12,597 11,917 11,285 10,799 10,399 10,257 10,292

Private industrial 6,427 6,549 6,564 6,437 6,283 5,979 5,688 5,338 4,784 4,281 3,816 3,514 3,366 3,401 3,608 3,551 3,532 3,516 3,330 3,374 3,418 3,469 3,576 3,722 3,773 3,729 3,664

Private commercial 31,199 32,335 33,398 34,405 35,428 35,861 36,094 35,189 33,189 31,083 28,273 25,557 23,806 22,881 23,105 23,710 23,680 23,853 23,853 24,266 24,274 24,050 23,215 22,485 22,375 22,265 23,044

All new work 78,867 80,652 82,221 83,457 84,560 84,631 84,141 81,667 77,341 73,430 69,506 67,584 67,439 69,511 72,749 74,905 75,907 76,741 76,862 77,602 76,755 74,753 72,702 71,420 70,943 71,668 73,382

Rolling 12 month quarterly new construction output 2007 - 2013 Q3 £m (current prices)

Sector

2007 2008 2009 2010 201320122011

Peak of the boom Bottom of the crash Recovery 1 More declines

Recovery 2….

Total new construction output - % changeThe public housing and non-housing sectors recorded the largest year on year declines in output in the 12 months to Q3 2013. The private housing and infrastructure sectors were the strongest performers

Table Updated

Source: ONS

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Public Housing 5.9 4.4 3.4 -0.3 -1.2 -1.1 -2.7 -4.0 -3.0 1.3 7.0 10.2 12.7 10.6 7.1 3.5 1.5 -1.9 -2.3 -4.7 -6.3 -4.5 -4.0 -2.7 2.2 2.2 -2.5

Private Housing 1.0 0.1 -0.9 -1.9 -3.6 -5.6 -8.2 -10.5 -10.2 -9.3 -4.8 -2.1 5.2 7.4 6.5 4.3 2.9 1.7 1.3 1.3 -0.7 -1.7 0.2 -0.8 3.1 4.6 7.2

Infrastructure 1.3 2.5 3.0 4.0 4.1 3.4 0.4 -0.3 0.7 1.8 8.1 9.2 9.0 5.5 0.3 1.2 2.9 3.1 5.4 -1.1 -4.8 -1.5 -0.5 1.6 3.0 0.8 4.9

Public non-housing 0.4 1.5 2.3 3.9 4.5 5.1 4.8 2.9 3.7 4.6 6.3 5.8 6.4 5.2 2.4 0.6 -1.7 -2.2 -4.3 -5.3 -5.4 -5.3 -4.3 -3.7 -1.4 0.3 -8.8

Private industrial 1.9 0.2 -1.9 -2.4 -4.8 -4.9 -6.2 -10.4 -10.5 -10.9 -7.9 -4.2 1.0 6.1 -1.6 -0.5 -0.5 -5.3 1.3 1.3 1.5 3.1 4.1 1.4 -1.2 -1.7 2.5

Private commercial 3.6 3.3 3.0 3.0 1.2 0.6 -2.5 -5.7 -6.3 -9.0 -9.6 -6.9 -3.9 1.0 2.6 -0.1 0.7 0.0 1.7 0.0 -0.9 -3.5 -3.1 -0.5 -0.5 3.5 -0.7

All new work 2.3 1.9 1.5 1.3 0.1 -0.6 -2.9 -5.3 -5.1 -5.3 -2.8 -0.2 3.1 4.7 3.0 1.3 1.1 0.2 1.0 -1.1 -2.6 -2.7 -1.8 -0.7 1.0 2.4 0.9

2013

Rolling 12 month quarterly new construction output 2007 - 2013 Q3 % change quarter by quarter (current prices)

%

change Q3 13 - Q3 12Sector

2007 2008 2009 2010 2011 2012

Total new construction output - £mQuarter on quarter there were small rises in all sectors, apart from industrial, over the 12 months to Q3 2013. The largest increase was in the private housing sector, at 4.6%

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000


2007 2008 2009 2010 2011 2012 2013

Rolli

ng 1

2 m

onth

co

nst

ruct

ion

outp

ut £

m (

curr

en

t price

s)

Public Housing Private Housing Infrastructure Public non-housing Private industrial Private commercial

Source: ONS

Total new construction orders - £m Rolling 12 months new orders saw a fourth consecutive quarter of growth to reach £54,615m. This is the highest figure since Q1 2009

12

Source: ONS


Public Housing 3,641 3,786 3,618 3,733 3,387 3,330 3,327 3,082 2,854 2,663 2,860 3,107 3,675 3,775 3,413 3,482 3,352 3,148 3,137 2,690 2,223 2,179 2,238 2,451 2,746 3,148 3,614

Private Housing 16,750 16,522 16,289 16,037 14,974 13,380 11,317 9,201 7,405 6,341 6,019 6,393 7,265 7,779 9,236 9,953 10,457 10,870 10,530 10,507 10,232 10,269 10,340 10,804 11,521 12,701 13,662

Infrastructure 6,158 6,470 6,634 6,966 7,076 7,574 7,768 7,897 8,151 9,037 10,431 11,032 11,909 11,177 9,589 9,774 8,533 7,461 7,687 8,499 9,736 10,216 11,171 12,510 11,185 12,202 12,495

Public non-housing 9,646 10,476 10,965 11,393 12,363 12,905 13,952 14,671 13,876 14,470 14,752 14,709 15,628 15,002 13,479 13,430 12,644 11,320 10,793 9,064 7,846 7,809 7,581 8,028 8,891 8,998 8,918

Private industrial 6,265 6,347 5,998 5,835 5,528 4,980 4,822 4,346 3,633 3,429 2,893 2,653 2,591 2,456 2,353 2,131 2,170 2,118 2,129 2,146 2,393 2,420 2,617 2,659 2,508 2,680 2,938

Private commercial 30,426 30,868 31,209 32,115 31,682 28,549 26,383 23,353 19,583 16,748 13,842 12,886 12,937 13,089 13,813 13,580 13,511 13,151 13,430 13,005 13,276 12,883 11,671 11,973 11,700 12,343 12,990

All new work 72,884 74,469 74,714 76,078 75,010 70,718 67,568 62,550 55,503 52,687 50,797 50,780 54,006 53,279 51,882 52,350 50,668 48,069 47,705 45,911 45,707 45,775 45,618 48,423 48,549 52,069 54,615

2013

Rolling 12 month quarterly construction orders 2007 - 2013 Q3 £m (current prices)

2010

Sector

2007 2008 2009 20122011

Total new construction orders - % changeAll sectors recorded a double digit leap in new orders in the rolling 12 months to Q3 2013, compared to the 12 months to Q3 2012. Public housing new orders grew at the fastest rate (61.5%) followed by private housing

13

Source: ONS


Public Housing 4.0 -4.4 3.2 -9.3 -1.7 -0.1 -7.4 -7.4 -6.7 7.4 8.6 18.3 2.7 -9.6 2.0 -3.7 -6.1 -0.4 -14.3 -17.3 -2.0 2.7 9.5 12.1 14.6 14.8 61.5

Private Housing -1.4 -1.4 -1.5 -6.6 -10.6 -15.4 -18.7 -19.5 -14.4 -5.1 6.2 13.6 7.1 18.7 7.8 5.1 3.9 -3.1 -0.2 -2.6 0.4 0.7 4.5 6.6 10.2 7.6 32.1

Infrastructure 5.1 2.5 5.0 1.6 7.0 2.6 1.7 3.2 10.9 15.4 5.8 7.9 -6.1 -14.2 1.9 -12.7 -12.6 3.0 10.6 14.6 4.9 9.3 12.0 -10.6 9.1 2.4 11.9

Public non-housing 8.6 4.7 3.9 8.5 4.4 8.1 5.2 -5.4 4.3 2.0 -0.3 6.3 -4.0 -10.2 -0.4 -5.9 -10.5 -4.7 -16.0 -13.4 -0.5 -2.9 5.9 10.8 1.2 -0.9 17.6

Private industrial 1.3 -5.5 -2.7 -5.3 -9.9 -3.2 -9.9 -16.4 -5.6 -15.6 -8.3 -2.3 -5.2 -4.2 -9.4 1.8 -2.4 0.5 0.8 11.5 1.1 8.2 1.6 -5.7 6.8 9.6 12.3

Private commercial 1.5 1.1 2.9 -1.3 -9.9 -7.6 -11.5 -16.1 -14.5 -17.4 -6.9 0.4 1.2 5.5 -1.7 -0.5 -2.7 2.1 -3.2 2.1 -3.0 -9.4 2.6 -2.3 5.5 5.2 11.3

All new work 2.2 0.3 1.8 -1.4 -5.7 -4.5 -7.4 -11.3 -5.1 -3.6 0.0 6.4 -1.3 -2.6 0.9 -3.2 -5.1 -0.8 -3.8 -0.4 0.2 -0.3 6.1 0.3 7.3 4.9 19.7

2013

Rolling 12 month quarterly new construction orders 2007 - 2013 Q3 % change quarter by quarter (current prices)

Sector

2007 2008 2009 2010 2011 2012 %

change Q3 13 - Q3 12

3. Quarterly output in the private sector (GB)

Private housing Rolling 12 months output saw a quarter on quarter increase in Q3 2013 of 4.6%. New orders were up 32.1% over the same period as the sector's recovery continues to gain momentum

0

2,500

5,000

7,500

10,000

12,500

15,000

17,500

20,000

22,500


2007 2008 2009 2010 2011 2012 2013

Rolling 12 m

onth con

struction output & orders £m

(current prices)

Output Orders

Source: ONS data for private housing

Private infrastructure Rolling 12 months output grew by 0.8% in the quarter, with orders growing by 2.4%. Year on year comparisons reveal that orders grew by 11.9%, suggesting further output growth in 2014 is likely

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000


2007 2008 2009 2010 2011 2012 2013Rolling 12 m

onths construction output & orders £m (current prices)

output Orders

Source: ONS data for infrastructure

Private industrialRolling 12 months output declined by 1.7% in the quarter as the sector continues to remain depressed. On the positive side, new orders grew by 12.3% year on year to reach the highest level since Q2 2009

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000


2007 2008 2009 2010 2011 2012 2013

Rolling 12 m

onth construction output & orders £m (current prices)

Output Orders

Source: ONS data for private industrial

Private commercial The industry’s largest sector saw output increase by 3.5% quarter on quarter in the 12 months to Q3 2013, but output was 0.7% down year on year. New orders increased by 11.3% year on year

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000


2007 2008 2009 2010 2011 2012 2013

Rolling 12 m


Output Orders

Source: ONS data for private commercial

OfficesRolling 12 months output to Q3 2013 was £6,502m, 51.4% lower than the peak of Q1 2008. New orders grew by 29.4% year on year, but remain 68.6% down on the peak of Q3 2007

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000


2007 2008 2009 2010 2011 2012 2013

Rolling 12 m


Output Orders

Source: ONS data for private offices (a sub-sector of private commercial output)

Private education and health Private health output continues to decline, with the year on year figure to Q3 2013 down by 13.0%. Private education output grew by 9.4% year on year continuing a more positive trend

Source: ONS data for private education and health

(sub-sectors of private commercial output)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500


2007 2008 2009 2010 2011 2012 2013

Rolling 12 month construction output £m (current prices)

Private Education Private Health

4. Quarterly output in the public sector (GB)

Public housing Output levels are now on the up, with the 12 months rolling output to Q3 2013 increasing by 2.2% compared to the previous quarter. The significant 61.5% year on year growth in new orders is being driven by the Government’s Affordable Homes Programme, which has a set target to reach by 2015

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500


2007 2008 2009 2010 2011 2012 2013

Rolling 12 m


Output Orders

Source: ONS data for public housing

Public non-housing 12 months rolling output grew by 0.3% in the quarter, but was down 8.8% in the year. With new orders remaining at a low level compared with 2008 to 2010, output is not expected to rebound significantly

Source: ONS data for public non-housing

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

13,000

14,000

15,000

16,000


2007 2008 2009 2010 2011 2012 2013

Rolling 12 m


Output Orders

Public education and health Although public education output grew marginally quarter on quarter in the 12 months to Q3 2013, it fell by 12.3% year on year. However, public sector health output increased by 7.4% quarter on quarter following increases in the first 6 months of the year

Source: ONS data for public education and health

(sub-sectors of public non-housing output)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

5,500

6,000

6,500

7,000

7,500

8,000

8,500


2007 2008 2009 2010 2011 2012 2013

Rolling 12 m

onth con

struction output £m (current prices)

Public Education Public Health

5. Regional overview

Regional comparisons London and the East of England are the only regions that have grown in size over the last 6 years. The output declines in the Northern and Midland regions clearly demonstrates the north/south divide

Source: ONS data for 11 GB regions. Includes new and RMI output

Region

Rolling 12

months to Q3

2007

Rolling 12

months to Q3

2013

% change

LONDON 19,883 23,789 19.6

SOUTH EAST 17,766 17,693 -0.4

EAST OF ENGLAND 12,231 12,916 5.6

NORTH WEST 13,711 12,090 -11.8

SCOTLAND 11,335 10,127 -10.7

SOUTH WEST 10,322 9,744 -5.6

YORKSHIRE AND THE HUMBER 10,960 8,678 -20.8

WEST MIDLANDS 10,010 8,996 -10.1

EAST MIDLANDS 8,665 6,686 -22.8

WALES 5,163 4,466 -13.5

NORTH EAST 4,967 3,875 -22.0

Total output - £m 125,013 119,060 -4.8

Total construction output £m (current prices) - new build and RMI work

6. Construction output forecast

What about the future for these sectors?

� At Leading Edge we issue a forecast on construction output levels every 6 months. Our latest forecast is available for purchase in January 2014 with full details on the website at: www.lead-edge.co.uk

� The forecast provides annual output figures and commentary by sector up to 2017:

o Housing (split by public & private)

o Commercial

o Public

o Industrial

o Infrastructure

o R&M housing (split by public & private)

o R&M non housing.

� The Leading Edge forecast also covers building materials forecasts for:

o Bricks (facings, commons, engineering)

o Blocks (dense, lightweight, concrete)

o Cementitious materials

o Readymix concrete.

� Forecasts up to 2015 are also provided for the 11 GB regions for total new build and R&M output.

7. Public & private sector output comparisons (GB)

New private construction output - % change quarter on quarterOnly industrial output declined in the 12 months to Q3 2013, with the commercial sector recoding growth for the first time since Q4 2011

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0


2007 2008 2009 2010 2011 2012 2013

Ro

llin

g 1

2 m

on

th c

on

stru

ctio

n o

utp

ut %

ch

an

ge

(cu

rre

nt p

rice

s)

Private Housing Infrastructure Private industrial Private commercial

Source: ONS

New public construction output - % change quarter on quarterPublic housing and non-housing both recorded an increase in quarter on quarter output for the first time since Q1 2011, which was the end of the Government’s spending boom

-15.0

-10.0

-5.0

0.0

5.0

10.0

15.0


2007 2008 2009 2010 2011 2012 2013

Ro

llin

g 1

2 m

on

th p

ub

lic c

on

stru

ctio

n o

utp

ut %

ch

an

ge (

curr

en

t p

rice

s)

Public Housing Public non-housing

Source: ONS data

Output comparison – 2007 Q3 to 2013 Q3The decline in commercial output is the key trend, but it remains construction’s largest sector by seven percentage points. The infrastructure sector has doubled its share of total output in the last 5 years

Source: ONS data

www.lead-edge.co.uk

… delivering a better understanding of your customers and markets

Tel: 01252 279990E-mail: [email protected]

construction output & orders report 2013 q3

Business

main construction sector

output orders source

private commercial output

private housing sector

construction output 2007

construction output

construction orders

order figures