This is the first-time annual construction value surpassed £200 billion and represented a 15% rise from 2021 output values in nominal terms.

Barbour ABI analysis of real versus nominal price indices showed the value would have been closer to £181 billion if prices had remained at pre-pandemic levels.

The construction information specialist is now forecasting an easing in price rises in the second half of this year.

Although it warns that some product lines like insulation, which recently jumped by 50%, could see double-digit price rises.

Barbour ABI chief economist Tom Hall said: “The Bank of England’s decision to increase the base rate to 4% is likely to weigh heavily on the residential sector over 2023 as mortgage holders tighten their belts.

“Added to this, the UK economy is widely predicted to stagnate as a best-case scenario over the short-term, which may well see other commercially sensitive sectors dependent on consumer spending also fall.

“Construction product inflation and shortages are expected to ease over the second half of 2023 but will not return to the stability in the 2010’s.

“Contractors are working on razor-thin margins. All in all, 2023 is likely to be another bumpy year.”

Nevertheless, Barbour ABI also saw high levels of contract awards agreed throughout 2022, which reached a record high in Q1 2022. As a result, Barbour ABI is predicting high levels of activity in construction during 2023 in the infrastructure, warehousing, and health sectors.