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Green Shoots Of Housing Recovery For 2024?
The construction sector rate of slump was the slowest since the current phase of decline began. While there was a good rise in repair, maintenance and...
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Construction Back To Pre-Covid Levels By 2022
Glenigan’s 2021-2023 Construction Industry Forecast shows activity has rallied and is on an upward trajectory since the start of the year.
2022 set to see a return to pre-Covid levels, with underlying project starts up 3% on 2019 levels however, private housing growth is predicted to be moderate, as unemployment rises and temporary stamp duty reductions end.
On the commercial building sector, greater public sector investment is expected to fuel recovery with large work programmes planned in education, health and infrastructure. There will also be a rise in office refurbishment as premises are remodelled for post-pandemic working.
The data has had projects of over £100 million removed to give a clearer view of the UK construction landscape. The forecast provides a comprehensive overview of where the construction industry is, in the here-and-now, combined with considered and fact-based forecasts of how the sector will perform over the next two years.
After a sharp initial upturn, a steadier progressive strengthening in project starts is anticipated over the forecast period. However, the recovery will not be evenly spread, with some regions and sectors performing better than others, reflecting a changing UK economic and social landscape.
Housing
Despite Private Housing showing a 70% rise against 2020 in the first five months of this year, the market is expected to cool over the coming months - Glenigan projects starts rising by 11% next year and 4% in 2023.
Schools
Positively, school project starts are forecast to rise 5% in 2021 and 14% in 2022, driving a recovery in sector activity as local authorities tackle a shortage of secondary school places. Work to deliver further education facilities is also forecast to rebound over the next two years due to increased government investment. The value of project starts is forecast to climb 8% in 2021 and 22% in 2022.
Healthcare
The outlook for the health sector is also brightening, with promised increases in NHS capital funding expected to lift project starts over the forecast period. Starts are expected to consolidate after last year’s growth before rising by 14% in 2022 and 6% in 2023 as NHS trusts develop and implement their investment programmes.
Office revival
Office starts are forecast to largely recover this year from the sharp decline experienced as a result of the pandemic, yet forecast will remain flat for the rest of the forecast period. A rise in refurbishment projects are expected to boost project starts in 2021 as tenants and landlords adapt premises to accommodate changing working practices.
“There are definitely reasons to be cheerful and the Forecast provides a good indication that the construction industry is returning to pre-Covid levels of activity. However, the sector faces a number of challenges ahead. Particularly, the current shortage of construction materials highlights the potential impact of supply-side constraints on the pace of the recovery over the next two years.”
– Allan Wilen
Forecast, economic director, Glenigan
Picture: Glenigan forecasts construction output to return to pre-Covid levels by 2022.
Article written by Cathryn Ellis
15th July 2021