Dublin, April 19, 2024 (GLOBE NEWSWIRE) -- The "United Kingdom Construction Industry Databook Series - Market Size & Forecast by Value and Volume (area and units), Q2 2023 Update" report has been added to ResearchAndMarkets.com's offering.
Construction industry in United Kingdom was expected to grow by 4.6% to reach GBP 164,564 million in 2023.
Despite near-term challenges in certain construction sectors, medium to long term growth story in United Kingdom remains intact. The construction industry in United Kingdom is expected to grow steadily over the next four quarters. The growth momentum is expected to continue over the forecast period, recording a CAGR of 4.0% during 2023-2027. The construction output in the country is expected to reach GBP 192,543.3 million by 2027.
The outlook for the construction market in the United Kingdom remains bleak from the short-term perspective. The surge in interest rates and the subsequent rise in construction material prices has forced the government to delay several large-scale infrastructure projects, including rail and roads. Housing construction activities have also slowed down in the face of macroeconomic headwinds in the United Kingdom market.
The number of businesses affected by to contraction in construction activities has also gone up substantially over the last 12 months in the United Kingdom. The publisher expects the market to remain under pressure in Q4 2023 and Q1 2024, with inflation maintaining steady levels in the region. This would lead to further collapses in the United Kingdom construction industry from the short to medium-term perspective.
The sluggish demand leads to a significant downfall in new housing construction activities in the United Kingdom
The surge in borrowing costs, coupled with higher inflation, has hit the disposable income of many in Britain. This, in turn, has resulted in the downfall of the housing construction market, as demand struggles to pick up pace in the United Kingdom. The S&P Global/CIPS UK construction Purchasing Managers' Index (PMI) declined to 45.0 in September 2023. This is down from 50.8 recorded in August 2023, and the lowest level seen from May 2020, when the global pandemic restrictions were in full effect.
With inflation maintaining a steady rate over in Q3 2023, demand is projected to remain sluggish from the short-term perspective. This will further dampen the growth prospects of the housing building market in the United Kingdom. The slowdown in construction activities is also visible in other sectors including infrastructure and commercial. In the commercial segment, concerns about the economic outlook mean that businesses are cutting their investment in the space. In the infrastructure segment, the government has delayed major projects due to cost overrun in 2023. All of these factors are affecting the growth of the construction market in the United Kingdom.
Construction businesses are entering liquidation at a rapid pace in the United Kingdom market
The slowdown in housebuilding projects, coupled with persistent inflation and delays in government-funded infrastructure projects, has resulted in thousands of construction companies going out of business in the United Kingdom. Data from the Insolvency Service, a government agency, reveals that approximately 4,280 businesses became insolvent in the 12 months leading up to June, based on a report published on the Financial Times. This marked a 16.5% increase compared to the same period in the previous year.
Buckingham Group, one of the leading construction firms, has termed extreme inflation levels alongside other unexpected impacts as the reason behind the downfall of the business. Notably, the smallest businesses in the sector are hit the hardest in the United Kingdom. Smaller, specialized subcontractors make up 60% of the overall insolvencies announced in Britain.
With inflation showing no signs of a slowdown in the European region, the publisher expects the trend to further continue from the short to medium-term perspective in the United Kingdom. This will further dampen the growth prospects of the construction industry in Q4 2023 and Q1 2024.
Construction material prices have surged substantially in the United Kingdom market over the last two years
The fallout of major construction businesses has been led by the surge in construction materials prices over the last 12 to 24 months in the United Kingdom. According to the Office for National Statistics, prices for construction materials have surged by 42.7% since January 2020. Prices of certain materials have continued to increase at double-digit rates. Ready-mixed concrete, for instance, experienced a price increase of 19% over the 12 months leading to June 2023. Precast concrete and bitumen prices, on the other hand, increased by 12%.
The surge in material prices has also resulted in several infrastructure construction project delays in the United Kingdom. The government, for instance, has pushed back the construction activities of Phase 2a of the high-speed railway line HS2 that connects Birmingham and Crewe. Similarly, construction activities on the HS2 terminal at London's Euston station have been delayed, while several other road projects have also been halted in the United Kingdom, due to cost overruns. Amidst a series of challenges faced by the construction industry, stakeholders are urging for comprehensive measures to stabilize the sector and prevent additional economic consequences.
Scope
KPIs covered include the following:
- Market size by value
- Market size by volume of construction
- Number of units
United Kingdom Economic Indicators
United Kingdom Top Cities Construction Data
United Kingdom Residential Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Housing type (multi family, single family)
- Key cities (Tier - 1, Tier - 2, Tier - 3 segmentation)
- Price point/income level (luxury, mid-tier, affordable)
- Construction stage (new construction, re-development & maintenance)
United Kingdom Residential Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Green building by Housing type (multi family, single family)
- Green building by Key cities (Tier - 1, Tier - 2, Tier - 3 segmentation)
- Green building by Price point/income level (luxury, mid-tier, affordable)
United Kingdom Commercial Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Office (further broken down by Grade A, Grade B, and Grade C)
- Retail (further broken down by Grade A, Grade B, and Grade C)
- Hospitality (further broken down by Grade A, Grade B, and Grade C)
- Restaurant (further broken down by Grade A, Grade B, and Grade C)
- Entertainment
- Sports facility
- Other commercial building construction
- Construction stage (new construction, re-development & maintenance)
United Kingdom Commercial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Office green building construction
- Retail green building construction
- Hospitality green building construction
- Restaurant green building construction
- Entertainment green building construction
- Sports facility green building construction
- Other commercial green building construction
United Kingdom Industrial Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units)
- Manufacturing Plants building construction
- Chemical & Pharmaceutical building construction
- Metal & Material Processing building construction
- Construction stage (new construction, re-development & maintenance)
United Kingdom Institutional Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Healthcare construction
- Educational construction
- Other building construction
- Construction stage (new construction, re-development & maintenance)
United Kingdom Institutional Green Building Construction Coverage: 10-year market size & forecast in value and volume (area and units) terms by
- Healthcare green building construction
- Educational green building construction
United Kingdom Infrastructure Construction Sectors: 10- year market size & forecast in value terms by
- Marine and inland water infrastructure
- Utility system construction (oil and gas infrastructure, communication infrastructure, power infrastructure, water and sewer infrastructure)
- Transportation infrastructure (highway, street and bridge construction, railway construction, airport construction, and tunnel construction)
- Construction stage (new construction, re-development & maintenance)
United Kingdom Green Infrastructure Construction: 10- year market size & forecast in value terms
United Kingdom Construction Cost Structure Analysis: 10- year market size & forecast in value terms
- Cost Analysis by Type (Material, Labour, Equipment, Others)
- By Material & Work Cost: It provides the cost outlook of material costs by type of materials used in construction (Cement, Steel, Sand, Aggregates, Bricks, Wood, Windows Glazing, Flooring, Plumbing, Electrical, Painting, Other Materials)
- By Labour Cost: It provides the cost outlook of labour costs (RCC Construction Work, Masonry and Plastering Work, Plumbing Work, Water Proofing Work, Carpentry Work, Electrical Work, Tile Fixing Work, CATV Antenna Points, Painting Work, Departmental Labour)
- By Type of Construction (New, Re-Development)
- By Material Cost: It provides the cost outlook of material costs by type of materials used in construction (Concreting Sand, Stone Aggregate, Ordinary Portland Cement, Reinforced Concrete (Grade 30 MPA), Reinforced Concrete (Grade 40 MPA), High Tensile Steel bars, Mild Steel Round Bars, Structural Steelwork, Plywood Formwork (1800*900*12mm), Clay Bricks)
- Type of Labour (Skilled Vs Unskilled). In-depth Understanding of Construction Market Dynamics: Understand market opportunity, industry dynamics, key trendstrends, and drivers across 40+ market segments and sub-segments of building and infrastructure construction industry in United Kingdom.
For more information about this report visit https://www.researchandmarkets.com/r/famq6y
About ResearchAndMarkets.com
ResearchAndMarkets.com is the world's leading source for international market research reports and market data. We provide you with the latest data on international and regional markets, key industries, the top companies, new products and the latest trends.
