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Construction industry forecasts good news for UK contractors and manufacturers

Construction Industry Forecasts for 2017 to 2019 estimate an overall rise of 7.4% for new-build infrastructure in the UK this year, with a continuation of 6.4% next year. It’s news that bodes equally well for leading suppliers of concrete repair and protection solutions such as Sika, as an increase in new buildings will inevitably lead to defects in newly-poured concrete requiring onsite attention.

So, what is this positive outlook for the country’s new building output based upon? Well, a number of factors across a number of key infrastructural sectors appear to be driving the optimism. Forecasts for the harbours and waterways sector are particularly encouraging, with year-on-year growth predicted thanks to huge waterside projects planned across the country in the coming years.

There’s the Aberdeen Harbour Expansion project for example. Commencing in September this year, the £350 million scheme – due to be completed in 2020 – will see the existing site expanded to include a facility for oil industry decommissioning work. Other upcoming UK harbour projects include a £135 million redevelopment of the port of Dover, and a £10 million project to build a new link-span bridge at the Port of Heysham in Lancashire.

Water spend

Upgrades in water treatment works are also continuing nationwide as part of Asset Management Period 6 which runs from 2015 to 2020. Water firms will have spent more than £44 billion in that time on improvement works agreed by water industry regulator, Ofwat, that include the Severn Trent Water’s Birmingham Resilience project, Wessex Water’s integrated supply grid, and the modernisation of United Utilities’ Davyhulme wastewater treatment plant. Work on London’s £4.2 billion Thames Tideway Tunnel project, which is being financed and delivered by an independent provider, is also boosting construction in this sector.

Spending on road maintenance is also expected to rise. Highways England has a maintenance budget of £1.3 billion over its first fixed five-year investment period, which began in 2015/16. In 2017/18, expenditure on maintenance is set to increase to £258 million, from the £254 million allocated for 2016/17.

Thereafter, it is expected to increase in 2018/19, before slowing in 2019/20. However, 97% of the roads network is governed by local authorities, which are financially-constrained due to cuts in central government funding since 2010. Whatever monetary restrictions councils face there is little doubt the condition of the country’s roads require urgent address, as an Annual Local Authority Road Maintenance Survey (ALARM) report revealed a 13-year backlog of local roads maintenance in England.

Energy drive

Infrastructure repair and maintenance is also expected to increase in order to maintain the country’s energy provision. With a delay in the building of nuclear power stations, National Grid announced it would be retaining the services of existing power plants initially earmarked for closure. Structural maintenance is likely to be required to extend the lifespan of the plants which will be held in reserve to boost electricity supplies if and when required.

Construction Industry Forecasts – headline figures for 2017 to 2019

  • Construction output to grow by 1.6% in 2017 and 0.7% in 2018
  • Private housing starts to rise by 3.0% in 2017 and 2.0% in 2018
  • Infrastructure construction to grow by 7.4% in 2017 and 6.4% in 2018

Construction Industry Forecasts for public housing repair, maintenance and improvement is a little less encouraging, with output in this sector expected to remain flat in 2017 and 2018, whilst commercial offices output is expected to fall by 1% and 12% during the same period. However, prospects for the builders of the nation’s infrastructure, and the contractors and manufacturing firms required to maintain it remain distinctly good. It would seem the UK is building towards a brighter future.

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By Charles Pierce, National Sales Manager – TM Refurbishment

Charles Pierce

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Housebuilders say Government New Housing Figures are unrealistic

74 per cent of housebuilders think the government’s aim of building a million homes during the current parliament is unachievable – so the latest survey run by the Build Show, as part of UK Construction Week, and Housebuilder magazine reveals.

Targeted solely at housebuilders, the survey has highlighted a number of strong opinions, concerns and predictions held within the industry about the future of this critical sector. Following the question on the government’s targets, housebuilders were asked what they thought were the main constraints to increasing the UK housing supply – the top two answers given were problems with the planning system and the availability of enough skilled labour.

As one of the first canvases of the sector since the EU referendum, the survey has provided a valuable insight into how the industry feels about the affects it might have. Over half of those surveyed said that Brexit would make meeting the UK’s new housing needs more difficult and only 11 per cent saying it would make it easier.

Equally, those surveyed were cynical of government initiatives such as the Starter Home scheme with two thirds saying it will not boost supply or that they’re unsure. Similarly, only 40 per cent believed that government initiatives would increase the number of affordable homes being built.

When asked about the possible solutions to the UK’s housing needs, 64 per cent of housebuilders felt that SMEs were the key. Also identified was offsite construction with over two thirds of respondents saying it would play a major role in new home supply as was new investment models with over 75 per cent highlighting the contribution they could make.

Nathan Garnett, Event Director for the Build Show, commented: “The survey has provided valuable honest insight into the housebuilding sector and clearly indicates that there is a lot of uncertainty. In this regard, the show in October will offer a much needed opportunity to develop strategy and build stronger business relationships with key customers, peers and associations. Excitingly, the sector also sees a lot of potential in SME builders and we do too. There will be a wide variety of content suited to both national and SME housebuilders at the show to help them overcome the hurdles they currently face.”

Some of the other notable findings from the survey include:

  • One third of housebuilders believe the government should do more to encourage more people into the industry
  • More than 60 per cent of those surveyed do not believe the private sector is capable of building enough homes to tackle the lack of UK supply
  • According to housebuilders, access to finance is the biggest barrier for SMEs, followed by the planning system
  • Almost two thirds of housebuilders believe that manufacturer innovation will play a key role in new home supply
  • When asked what would be the one thing that would help them build more houses, the top five answers from those surveyed were: improvements to the planning system, more investment and access to funding, more skilled labour, increase in land supply and innovation such as offsite construction methods

Taking place at the Birmingham NEC from 18 – 20 October, UK Construction Week combines nine shows in one location. With over 24,000 trade visitors last year – a figure expected to double at this year’s event – the show boasts over 650 exhibitors. Visitors are able to attend Timber Expo, the Build Show, Civils Expo, the Surface and Materials Show, Energy 2016, Plant & Machinery Live, HVAC 2016, Smart Buildings 2016 and Grand Designs Live.

For more information, booking enquiries or to register for free to attend, please visit www.buildshow.co.uk or follow @BuildShow on Twitter.
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