20th January 2016

UK construction industry: a 2015 review

2015 was a busy year for the team at Integrity Software, with plenty of new faces in the offices, dozens of new clients to welcome and a handful of large client events to host.

UK construction industry: a 2015 review

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For the wider UK construction industry, the year was as eventful as any other. The election in May certainly impacted on the country’s construction companies, and the subsequent Conservative budget and spending review also had huge ramifications for the industry. As 2016 begins, we review the past 12 months and take a look at the good, the bad and the ugly in UK construction in 2015.

Forecasts vs. figures

2014 was an optimistic, booming year for the construction industry, and hopes were high that 2015 would continue along this trajectory. For example, the Construction Products Association expected 5.3% construction output growth during the year. However, by the end of November 2015 the same organisation said that 3.8% growth was more likely.

The Office for National Statistics released construction output figures for each month, but headlines were made when an extra £2 billion was added to output statistics when Q2 figures were revised. This meant the industry produced 2.4% more output than previous figures suggested. A closer examination of the data revealed that this huge change was largely down to the reclassification of a single large firm from the services sector to construction.  Therefore, little had actually changed into the industry, and this incident serves as a reminder that we shouldn’t take data at face value.

Politics

The polls, the press and even the politicians themselves expected there to be another coalition government in place after the 2015 general election. This uncertainty caused the sector to dip in the run up to the vote, but the surprise result was welcomed by most of the construction industry as stability returned. The Conservative result promised a pro-business, pro-infrastructure investment government for the next five years.

The July budget was mixed news for businesses, with the costly living wage unveiled and key infrastructure projects delayed, in addition to a reduction in tax relief for buy-to-let mortgages. However, a new document on planning was released shortly after the main speech, outlining additional ways to free up land and fast track housing developments.

The Autumn Statement and Spending Review repeated many of the points from the Budget, with some other promising additions such as a doubling in the housing budget. However, there have been plenty of less welcome announcements so far this parliament…

The death of green schemes

2015 was an incredibly bad year for UK companies operating in the energy efficiency and retrofit arenas. Green Deal funding ended, the target for all new homes to be zero carbon by 2016 was scrapped, the Energy Company Obligation ended, the Renewable Heat Incentive scaled back, and solar power subsidies were slashed. In the Spending Review, it was revealed that the Department for Energy and Climate Change (which administers most green schemes for companies and consumers) will have to find 22% of day-to-day savings by the end of the parliament. Of course, it is not so much the individual schemes that are a great loss to the industry, but the speedy about-turn by the ‘greenest government ever’ and the huge uncertainty this change of heart has created.

At Integrity Software

Here at the Integrity Software offices, 2015 started with the appointment of our new managing director, Sophie Hurst. We introduced new features and new modules, and expanded our ever-popular Integrity LIVE@ Events series with six huge events across the UK and Ireland.

2015 was an exciting year for us, and we hope you’ll stay with us to experience the new software upgrades and events that we’re waiting to roll out during 2016.

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