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Construction industry in the UK - statistics & facts

The COVID-19 pandemic hit the UK construction industry hard in 2020, with overall output declining by over 46 percent y-o-y in April 2020 due to the strong enforcement of the measures to stop the spread of the disease. However, there has also been a strong recovery, with the construction output in the United Kingdom reaching positive growth rates every month since March 2021.

A strong recovery from the COVID-19 pandemic

In the third quarter of 2021, not only did the gross value added by construction activities in the UK reach pre-pandemic levels, but they also kept growing in 2022. This positive outlook could be observed throughout the entire country. For instance, the number of new homes registered to be built in 2021 increased in every region except London in comparison to the previous year, with growth rates of over 45 percent in North East, East Midlands, and Eastern. The industry segment with the highest market share increase was infrastructure construction.

An industry facing increasing challenges

However, even if the overall trends signal strong growth, the construction industry in the UK has been facing many challenges in the past months. In addition to the ongoing COVID-19 pandemic, inflation and Russia’s war on Ukraine have further disrupted the supply chain and increased the cost of building materials. In addition to all these factors, the industry was already in a vulnerable position as the stock levels for construction reached their lowest point since the start of the pandemic in the last quarter of 2021. For example, the increasing oil and energy prices affected materials whose production is energy-intensive, such as steel. In March 2022, the price of concrete reinforcing bars, which are also made of steel, was 45.8 percent higher than in 2021. The growth of oil prices also has affected the cost of transportation of other construction materials, resulting in overall higher prices for most construction materials.

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