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Construction R&D outperforms UK as a whole

July 2021

R&D spending in the construction sector held firm in the first quarter of this year despite the disruption caused by the pandemic, according to analysis of the latest ONS data by business tax relief consultancy Catax. 

The construction industry invested £92 million in R&D between January and March this year, representing no change on Q1 2020.  This was also flat on Q4 2020, and still represents a record high for the sector.  The figures are not adjusted for inflation, however, with CPI running at 0.7% in the year to March 20212, so this will have a marginal impact.

Despite being flat on an annual basis, the construction industry’s performance in the first quarter was better than UK industry as a whole.  Total R&D spending by UK businesses dropped 3% annually to £9.7 billion in Q1.  UK GDP in Q1 2021 was down 1.6% on the previous quarter3.  The industry had defied expectations last year overall, with an 7.9% rise in R&D investment from £341 million to a record high of £368 million.

Mark Tighe, CEO of R&D tax relief consultancy Catax, comments: “The construction industry has managed to hold on to the level of R&D investment it had set on the way into the pandemic and that’s an achievement in itself.”

“This sector was badly affected for a short while last year as sites closed and companies worked out how they could continue to operate safely. It seems they succeeded, and spending remains on a par with the first quarter of 2020 while R&D investment by UK industry more widely has sunk dramatically.”


Image credit: Pixabay

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