The construction industry is set to bounce back strongly next year, according to Glenigan’s latest construction industry forecast.
Glenigan said the underlying value of construction starts in the UK this year would be down by 18% compared with the previous year, but that activity was likely to improve in the coming months thanks to new opportunities in the warehousing and logistics sector, office and retail refurbishments and fit outs, and the repurposing of redundant commercial premises.
Public sector investment is expected to provide the greatest opportunities in the near term with the education sector projected to experience the highest rate of growth this year, with an 18% increase in the value of underlying starts.
Allan Wilén, Glenigan’s economics director, said: “Renewed construction growth is forecast for 2024 and 2025 as a strengthening UK economy lifts consumer and business confidence. Improved household spending and consumer confidence are expected to feed through to increased activity in consumer-related areas.
“There will be a rise in office refurbishment work as premises are remodelled to accommodate a shift in post-pandemic working practices, while an increased growth in online retailing will provide a catalyst for renewed investment in logistics facilities from 2024.
“Public sector construction is expected to be a bright spot during 2023 as government departmental capital programmes are boosted by the rolling forward of 2022/23 underspend into the current financial year. Increased government funding is expected to drive the education, community and amenity and health sectors, although departmental budgets are likely to be reviewed post-election, potentially slowing sector activity during 2025.”
