Industry monitor, Glenigan, indicates the construction sector will see growth of 8% in 2023, despite a decline this year, in its UK Construction Industry Forecast for 2022-24.
Glenigan’s insights reveal a turbulent economic environment for the construction industry in the coming years, forecasting a 2% contraction in the sector this year, before returning to growth in 2023.
The industry monitor warns that economic uncertainty linked with global supply chain challengers, high inflation and war in Ukraine is hampering post-pandemic recovery for the sector, which saw job sites closed and new project starts pushed back.
Closer to home, a surge in housebuilding activity in 2021 is beginning to fade as the end of the Stamp Duty Holiday and rising interest rates on mortgages have hit confidence among homebuyers. However, the Build-to-rent market has a strong development pipeline, alongside office and industrial units that can accommodate new ways of working, and government-backed projects in the education and healthcare sectors.
Commenting on the Forecast, Glenigan’s economic director Allan Wilen said,
“Circumstances have changed significantly since the November 2021 Forecast and, whilst the short-term picture appears challenging, we should adopt a sanguine approach for the next few years. Markets sent into turmoil by the Russia-Ukraine War are starting to stabilise as new supply chain solutions are developed and established.
“Of course, in the near future construction and building product costs will remain high. However this situation will no doubt encourage a burst of imagination and innovation which will see the sector weather the current storm and progress to, if not sunny uplands, then at least towards a trajectory of upward growth.”
Glenigan’s UK Construction Industry Forecast 2022-2024 is available to read online here.
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