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‘Market rallying’ government set to drive construction growth

The “seismic” final result of the final election is anticipated to spice up key elements of the development trade.

Particularly, robust enhancements ought to come within the personal housing, retail and workplace refurbishment sectors, in line with Glenigan’s development trade forecast for 2024-26.

Though the info specialist warned of “near-term challenges”, together with sluggish financial progress and excessive rates of interest, the sector’s prospects are set to brighten in the direction of the top of 2024, it mentioned.

Glenigan forecast “restoration within the not-so-distant future”, together with a modest enhance within the variety of undertaking begins (3 per cent).

The restoration is ready to hurry up, with a 7 per cent rise in undertaking begins anticipated in 2025 and an additional 6 per cent increase in 2026. That’s partly right down to an easing in borrowing prices and a projected increase to the UK financial system of about 0.8 per cent this yr.

Glenigan economics director Allan Wilen mentioned indicators of progress pointed to a “gradual restoration” forward.

“Nobody might have predicted a landslide of such massive proportions [in the general election] and, while the uncertainty through the pre-election interval hinted at a slower tempo of restoration, we might simply see an acceleration because the Labour authorities removes obstacles to getting shovels within the floor, from easing planning restrictions to embarking on main capital tasks,” he mentioned.

Glenigan pointed to a “sluggish” fee of undertaking begins within the sector over the primary half of 2024, as a result of excessive rates of interest and a weak financial outlook. 

In the meantime, the analyst mentioned the election hit the pipeline of labor, disrupting the progress of public sector tasks.

Selections on main infrastructure schemes have additionally been pushed again, amid the necessity for the brand new authorities to overview bumper developments, together with the Decrease Thames Crossing. A choice on that project is now expected on 4 October.

Glenigan projected a “strengthening financial system” later this yr, which might increase client spending and investor confidence, whereas the brand new authorities was “already decreasing political uncertainty and rallying markets”, it mentioned.

The retail, resort and leisure sectors are anticipated to obtain a lift later this yr, as value inflation eases and family budgets enhance, whereas “new alternatives” are anticipated within the workplace refurb and fit-out sectors.

Glenigan additional expects “renewed funding” within the logistics sector due to a rise in on-line retail.

Final week, Labour chancellor Rachel Reeves informed a bunch of enterprise leaders that the federal government would reform the “antiquated planning system”.

The present system “leaves too many necessary tasks tied up for years and years in crimson tape earlier than shovels even get within the floor”, she mentioned.

Reeves additionally introduced an finish to the de facto ban on onshore wind.

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