Rolling live coverage of business, economics and financial markets ahead of Bank of England interest rate decision
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10.17am BST
UK construction output was already back to its pre-Covid level in the second quarter of 2021, noted Samuel Tombs, chief UK economist at Pantheon Macroeconomics.
He said:
Looking ahead, the decline in Covid-19 infections in recent weeks should help to boost builders’ staffing levels. But construction demand might falter when surging input prices hit customers.
In addition, new housing demand likely will ease after the threshold for stamp duty has returned to £125K at the end of September. Commercial property vacancies also probably will increase as firms seek to take advantage of the shift towards working-from-home by shrinking their office space, and as more high street retailers disappear, thereby dampening demand for new buildings.
10.04am BST
It’s a problem companies like to have, but it’s nevertheless a problem: construction companies are working at full tilt so are having to leave orders on the table.
It was unsurprising that the industry was unable to maintain June’s 24-year high in output growth, particularly when “widespread supply shortages and constrained capacity to take on additional orders” were added to the mix, said Tim Moore, economics director at IHS Markit. He said:
July data marked the first real slowdown in the construction recovery since the lockdown at the start of this year.
The loss of momentum spanned all major categories of construction work and was most pronounced in the house building sector.
