Things look promising for the UK construction industry in 2019, with large projects around the country, higher than ever construction output in 2018, and a rise in demand for residential properties. It won’t be plain sailing, and Brexit concerns will of course have an impact on the UK construction industry, as will major changes that occurred in 2018, like the collapse of construction giant Carillion. Uncertainty may halt businesses from signing off on projects and labour shortages may be exacerbated, however new homes and infrastructure projects should help to offset any potential losses.
In November 2018 there was an all-time high level of construction output in the UK, and the total value of construction output exceeded £14 billion for the first time since the records began in 2010. After a slight fall in the earliest months of 2018, the year showed impressive growth in the construction industry and this looks to continue for 2019 too. The effect of Carillion’s bankruptcy should also be recognised, with many sub-contractors not being paid and many major construction projects being halted. There was a poor performance for the industry at the start of 2018, due to Carillion and extreme bad weather, and this was estimated to have lost UK construction £1bn of work. However, things improved over the year, and in the last months of 2018, construction in the UK was up, with an increase in new housing of 4.9 per cent and a 6.5 per cent in infrastructure.
Property development experts RW Invest are increasingly investing in major projects across the country, providing new opportunities for investors and construction experts. With such a high demand for rental property, buy to let investments in new build properties continue to be lucrative. Providing housing and addressing the UK housing crisis remain high priorities and investing in new build property is another boost to the UK construction industry.
The Construction Products Association’s Summer Forecasts anticipated predicted growth at a rate of 2.3 per cent in 2019 and 1.9 per cent in 2020. Housebuilding is set to be the main driving force for growth in the industry, and major infrastructure projects like HS2 and Hinkley Point nuclear power station have led to an infrastructure output which was forecast to rise by three per cent in 2018 and 13 per cent in 2019.
There has been a steady increase in the level of construction in the UK, and new construction methods, especially modular construction, will be seen more and more throughout 2019. This can help speed up the build process and make homes more affordable. Construction output increased by an impressive £857 million in the most recent three-month period compared with June to August 2018. New work has been the biggest contributor to this, with private housing, which grew by £451 million, and new infrastructure projects, which grew by £332 million.
Further investment in training, skills and apprenticeships is still needed for the construction industry, with a lack of skilled workers still affecting the industry as a whole. The UK has been trying to remedy the severe undersupply of housing, and developers are increasingly building up rather than out, providing new apartments in popular locations. There has been a wealth of new developments across major cities in the UK, with a demand for city centre living rising across the country.