13th August 2014
The UK construction industry: a five-year forecast
Infrastructure projects are forecast to be one of the biggest areas of development within the construction industry over the next five years. What are the others?
In the shadow of an economy slowly getting back on its feet after the recession, the construction industry is showing positive signs of being an integral part of the UK’s recovery. Although there will be significant challenges related to an economy in recovery over the next five years, it will also be a period of great opportunity for those within the industry bold enough to take risks. Here is Integrity Construction’s succinct five-year forecast for the construction industry.
Skill shortages are of increasing concern within the construction industry. Unfortunately, owing to the long-term nature of the training required, it will take time before we can expect ‘homegrown’ talent to fill the gaps. In the short-term it is expected that the industry will continue to rely heavily on skilled labourers from abroad. It is hoped that individual companies and contractors might begin to better exploit the possibility of continued professional development, the lack of which is currently thought to be a principal reason behind skill shortages. In the meantime, construction firms will have to deal with the higher staff costs associated with sourcing skilled labour elsewhere.
Despite the definite positive change in fortunes for the industry since the recession, there is no doubt that there are still fewer opportunities and therefore lower prices. This is the inevitable result of both public spending cuts and lack of confidence amongst private investors. It is thought that the next five years will see marked improvements in both these areas.
Further to the creation of UK domestic climate change legislation and having signed up to European carbon cuts - 34% by 2020 - the construction industry will play a central role in delivering these objectives. Although the government have been sending out mixed messages regarding green construction growth, it is hoped that legislation such as the Green Deal, zero-carbon homes and energy companies obligation (ECO) as well as greater consumer demand could give the construction industry the focus and confidence necessary to invest in environmentally friendly projects. Some estimates for growth within the sustainable building industry are as high as 23% per year for the next three years. If taken advantage of, the pairing of environmental pressures with construction offers unparalleled potential for economic growth and job creation. However, given politicians’ reluctance to embrace these issues, uncertainty remains.
It’s possible that smart construction and digital design could play key roles in helping construction companies reach environmental targets. As our economy becomes more and more digitally centred, this could have profound effects upon the built environment and the construction industry as a whole. Advancements could include remote monitoring of buildings and assets, therefore allowing for far more efficient maintenance. The UK’s pedigree in innovative and advanced engineering and design should hopefully place the industry in prime position to take advantage of this opportunity. Smart construction is a fast growing but young industry and, as such, if the UK construction sector can exploit this opportunity then the rewards could be vast, including a significant share in the export market.
As part of the government’s bid to bring the recession to a swift end, and begin recovery with sustainable growth (that doesn’t rely on house price inflation), a great many infrastructure projects have been set in motion. Included in this bracket, of course, are developments such as HS2 and the new nuclear reactors at Hinckley Point. Infrastructure projects like these have the potential to boost exports and persuade foreign investors that the UK would make a prudent investment choice. Many construction companies and contractors can expect to benefit from the trickle-down effect of infrastructure projects over the coming five years, if not from the projects themselves
It is also highly likely that an increasing number of construction businesses of varying sizes will turn to specialised construction software for all their accounting needs. Integrity Construction offers user friendly software that has been designed especially for construction industry professionals. A variety of different systems allows businesses of any size to benefit from our compliant software that enables easy job costing, accounting, procurement processing, payroll evaluation as well as much more. The software comes with user training, telephone support and monthly interactive events. Contact us if you would like to find out more or request a demo.
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