How well is the UK construction industry performing? What you need to know
The last decade has had its ups and downs for the British construction industry. While 2018 held a large upturn in the industry’s fortunes, the outlook was less positive through 2019. But how well is it doing now, and will its current trend carry on into 2020? Only time will tell, but this article aims to cover the industry’s current performance along with how well we think construction will go in the next year.
In recent years, the industry has been thriving. In 2016, the value of new construction work built was £99,266 million, a record high. In 2016 and 2017, the number of houses built was up by 74% in comparison to 2012. Last year was particularly good, as there were 2,731,370 people employed within the industry, and in August alone there were 52 blocks of flats over 100 feet tall in construction. This has all fallen under the government’s plans to build 1 million new houses by 2020. These plans have been beneficial to companies providing flat roof demarcation, as this is a vital aspect of safe construction.
However, in 2019, the construction sector appears to have fallen behind. Industry surveys described it as “mired in a downturn” – for eight months straight, activity decreased. It’s guessed that this downturn is due to a reduced demand for housing, perhaps related to climbing prices in the nation. The sector has been in somewhat of a slump since, as the prospects of the national economy seem dark.
Commercial construction has been hit harder than others as the industry as a whole has fallen down. Civil engineering is at its lowest point of activity in the past ten years, and, contrary to the government’s plans, residential construction has been falling for four consecutive months. Overall, 2019 has been the worst year for the construction industry since 2008.
Some suspect that the industry has been less active as there have been fewer opportunities for work recently. Generally, when one building contract is complete, the company will take on more afterwards, as businesses generally do. However, sources of new work appear to have ‘dried up’ – while work still exists, there is much less, meaning that the construction companies have had less to do, and therefore have made less money. It’s estimated that construction clients have become more hesitant in recent months, causing drops in demand for commercial construction companies. This would explain why the commercial side of the construction industry has been hit so hard through 2019.
Activity has remained low, however it has risen in November. Could this be a sign of an upcoming renewal for the industry? While a downturn is evident right now, nothing lasts forever, and it’s very possible that things could still turn upwards for the construction sector.