*Building* A Better Future - 2021 Tips For The Construction Sector
There have been numerous reports released over the last few months assessing the impact of COVID on the construction industry and forecasting the recovery in 2021 and beyond. According to the Glenigan report the UK construction industry project work is predicted to decline in 2020 by 27%, with an overall increase of 17% in 2021 and then a further increase of 9% in 2022, however we’ll still be below our pre-COVID levels by the end of 2022.
They also provide an interesting in site into the industry sectors with:
- Weak average earnings and rising unemployment holding back private housebuilding;
- A rise in office refurbishment work as premises are remodelled;
- Retail and Hotel & Leisure sectors hardest hit by COVID restrictions;
- Online sales boost to investment in logistics facilities;
- Greater public sector investment fuels recovery in social housing, health, schools and civil engineering; and
- Major projects boost civil engineering workloads.
However, it should be noted that the recovery in construction activity will be greatly influenced by the course of the COVID-19 pandemic, which will obviously have a direct impact on these forecasts.
A report by Construction Products Association (CPA) published in October this year forecasted that output is expected to fall less than previously feared in 2020, with a most likely scenario seeing output falling 14.5 per cent in 2020 compared to 2019. This is an improvement from the 20.6 per cent drop it had forecast in the summer, and a lot less than the Glenigan prediction. Their upgrade in their forecast was due to the quick re-opening of sites after lockdown, social distancing having less impact on productivity than initially feared, and stronger-than-expected demand for housing and refurbishment work.
Housing demand is currently buoyant, the body said, but the sector was the worst affected by the lockdown with sites and companies fully shutting across the country in April and May. They also warned that demand could falter if unemployment rises. The government have put certain measures in place to combat this however we won’t know the full impact of these measures until later in the new year.
So looking ahead to next year and beyond, what changes can we expect in the industry and what should we be focusing on. Here are just a few that come to mind:
Growth of Online Facilities
The high street is changing as more businesses head online. This change has affected all of the industries that usually populate the high street and could lead to less construction of new commercial buildings, although current facilities may want to improve their ability to cope in the new landscape with renovations to their existing structures.
Renovation of Town Centres
Before COVID many councils were looking at creatively leading a revival of their local town and city centres. Time and creative leadership are necessary for the physical aspects of our town centres to adapt to the massive changes in shopping habits, global trends and what attracts people to town centres, including renovating some of the most run-down centres. This has a positive knock-on effect for construction as it gives contractors endless opportunities to start on large-scale projects that they have previously been unable to perform.
The Impact of Brexit
We have not yet felt the full impact of Brexit however all construction firms should by now have the necessary contingency plans in place. The impact of Brexit on supply chains and the cost of materials may have a lasting effect on the construction industry, with many companies having to find new ways to deal with these changes.
Increased Use of Technology
Technology will lead the change in the construction industry in a number of ways, particularly through its implementation of health and safety procedures, its energy-efficient practices and its ability to manage projects in a more efficient way. From project management software to data analysis, there are a huge range of different technologies that will soon have an impact on construction and getting ahead of the pack could have a major impact on your cost base, efficiency levels and ability to complete projects in shorter timeframes.
Focus on Large Housing Developments
In 2019, the UK saw housing developments and new housing plots grow to their highest level for 30 years, and, even though this was impacted by COVID, there are no signs of this decreasing as the government looks to find new areas to build homes for our increasing population. This may mean that construction workers are able to find new projects on a domestic scale, as new housing estates are starting to be built across the country.
If you have any questions or need any further advice, please don't hesitate to get in touch with us today, or email our construction sector specialist andrew.coney@raffingers.co.uk.