In terms of the UK, the government’s pro-infrastructure outlook has certainly been a hit for the construction industry, but with the surprise Brexit result comes uncertainty that construction companies will have to face in the coming months and years..
Let’s take another long, hard look through the crystal ball and see how the UK construction industry is set to fare in 2017…
The Autumn Statement
2016’s Budget and Autumn Statement were mixed in terms of economic data - but many commentators in the construction industry were heartened by the government’s approach to construction, housing, productivity and infrastructure projects.
The government announced a £23 billion National Productivity and Investment Fund, with the funds due to be invested across the next five years. There will be £2.3 billion available to deliver housing and infrastructure in high demand areas, plus extra money for affordable homes. £1.1 billion will be spent on improving England’s transport networks, with £220 million available to deal with traffic ‘pinch points’.
Rural businesses were no doubt pleased to hear that the government’s is raising its investment in digital infrastructure, too, with 100% business rate relief on new fibre infrastructure.
Although these measures may not have been as expansive as some would have hoped, the industry can be satisfied that it was given priority even when the economic figures look less than rosy.
It’s a huge challenge for researchers to predict how the economy will fare in 2017, with the impacts of Brexit highly variable depending on the stance taken by the government and the EU. However, it’s worth noting that the pessimistic predictions formed prior to the referendum haven’t yet proven true.
The Construction Products Association predicts that construction growth will overall remain flat during next year, but, importantly, certain sectors will see more positive outcomes - namely infrastructure and education.
Glenigan [PDF] has made similar predictions - they expect a 29% growth in infrastructure output in 2017. They also forecast that the North East, the North West and Wales will be the regions to see the biggest boosts to construction growth.
Should we be optimistic?
Although 2017 holds some uncertainty for construction companies, there are signs that the industry can weather the storm - and some companies will see exciting growth.
As the government is seemingly committed to large infrastructure and housing investments, the UK construction industry looks set to benefit especially when these projects go ahead.
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