Posted: 22nd May
Construction growth on its way?
As the UK’s economy continues to battle its way out of a recession, there’s continual optimism for the construction industry – it’s set to grow 4.5% this year.
The Construction Products Association had a positive view of the future for the industry in their latest forecast. In fact, they predict a rapid increase in private house building, as well as steady growth in the infrastructure and commercial sectors.
The benefits should be felt pretty quickly too, as the expected 4.5% growth relates to the here and now (and don’t forget this is up from the previous prediction of 3.8%). Plus, growth is expected to reach 4.8% in 2015, so we’re not talking about decades. The construction industry as a whole is expected to grow 18% by 2017 and contribute a whopping £20billion to the UK economy, which is a long way from the often dismal times between 2008 and 2012.
What’s interesting about the predictions is that the areas of the contruction industry that are most likely to benefit surround the commercial sector. Whilst the demand for residential homes is increasing rapidly, private house building only accounts for 15% of the anticipated total growth. That’s despite the help garnered by the government’s extension of the Help to Buy scheme in the 2014 Budget.
The largest and most lucrative area is expected to be the commercial sector, with offices in particularly high demand (presumably as the economy improves for small-to-medium businesses). The demand for offices is expected to rise 7% in 2014 and 10% next year.
The infrastructure sector is likely to thrive in the coming months too. Network Rail alone have an £38billion investment programme over the next five years, while investment in road-related work will be in stark contrast to it’s slump in recent times.
So why all the improvements?
Well, there’s no doubt that the improvements to the housing market have flowed through to the construction industry. But, in a nutshell, the forecast is bullish, but also entirely understandable. Whether we’re talking about public housing, commercial office buildings, retail properties, public sector construction, energy infrastructure, the roads or rail, demand is high. And that only means good news for the construction industry and the UK economy in general.