ABSTRACT
Construction new work output increased by 4.6% over the 12 months to Q4 2022 according to the latest data release from the Office for National Statistics. The latest industry forecast from the Construction Products Association suggests construction output will contract by 6.4% in 2023, primarily driven by a short but sharp anticipated downturn in housebuilding activity and a reduction in repair and maintenance expenditure in the housing sector. The construction sector will feel a chill from tighter financing conditions and the fallout from lagged effects of the different monetary policy environment over the past 15 months. The higher interest rate environment introduces additional risks to a construction supply chain that has experienced commercial stress for some time now. High rates of general price inflation are an enduring problem, likely to persist over 2023.
