Confidence is returning to the UK construction sector, driven by a 16.5% surge in new orders in Q2 2024, according to the most recent UK Construction Market Outlook Report
The UK Chancellor’s recent promise to invest £100bn in capital projects over the next five years will provide an additional boost to the overall project pipeline. Specifically, the additional £4bn earmarked for education, including £1.4bn for the school rebuilding programme, and £500m in new funding for the Affordable Homes Programme, bringing total investment in housing supply to over £5bn, will provide some much-needed stimulus.
With inflation now relatively low at 2.3%, and the Base Rate cut to 4.75%, the current macroeconomic context adds to the certainty for the industry in the short- to medium-term.
However, there are still issues of concern; not least of which is a continuing lack of clarity from central government about supply and resource capacity in the industry. Additionally, the tax-raising measures in the recent Budget, including an increase to employers’ national insurance contributions, could do more to stifle private sector investment than encourage it.
Nick Gray, Chief Operating Officer, UK & Europe at Currie & Brown comments: “The construction industry looks set for a period of further growth, driven by bold investment from the government and stabilising economic conditions in the UK. At the same time, it’s encouraging to see the industry’s focus on innovation through the adoption of Modern Methods of construction, better data and new technology.
"But we cannot afford to be complacent. Against a still unpredictable geopolitical backdrop, firms must remain agile. Curation of advances in digital technologies like AI to enhance project efficiency and adopting two-stage tendering will be crucial to building and maintaining resilience as the UK’s economic and political landscape unfolds.”
