What reasons are there for optimism in construction?

What reasons are there for optimism in construction?

If the construction industry in the UK is healthy then there’s a good chance that the economy will be too. The stimulation that construction offers to employment and economic growth has a ripple effect that reverberates across numerous sectors. Supply chains and related industries all benefit, especially when materials are also sourced within the UK, ensuring that financial gains are reinvested at home projecting growth and activity for both workers and businesses.

So, is there optimism for growth

2008 was a nadir for many industries as the recession began to take hold. Investments slowed as people lost economic confidence, manufacturing ground to a halt and the housing market crashed. As a result construction fared particularly badly, the knock-on effect being felt further on down the supply chain and beyond. Although construction output levels fell faster than the economy itself in 2008, by the time that things began to turn around just one year later in 2009, construction showed recovery at a rate faster than the economy. With the CBI reporting that for every £1 spent in construction, £2.84 worth of economic activity is generated, it’s easy to see why fortunes can be reversed so swiftly.

Growth has remained steady from this point on with confidence slowly seeping back into the sector. Technological advancements are certainly helping to drive the industry forward with developers now able to plan and execute projects more efficiently, using processes that are far more streamlined from conception through to realisation.

Innovation

As with other industries there are other countries who may be able to offer construction services at a competitive rate against those in the UK. For that reason it’s important that British constructors strive to remain innovative, at the forefront of technology and driving enhancements in the sector. Keeping abreast of developments around the world is essential to remain at the cutting edge of the business and in a position to be ready to lead and compete as recovery continues.

What next?

Although construction appears to have stabilised, some degree of uncertainty does still exist. As the economy grows so construction will mirror this growth, but only if it continues to fully embrace technology and does not resist change or transformation. There are still many challenges to come however and whilst construction is a known stimulator of employment, there may yet be choppy waters to navigate. The government obviously believes in the industry by pledging to create three million apprenticeships in the coming years, an attempt to plug the skills gap that has emerged over time. Incentives to encourage growth and a commitment to build houses are positive moves but will only work if the skills issues are addressed quickly.

The figure of 200,000 new homes continues to be regularly banded about and, if this is to come to fruition, the positive knock-on effect to other businesses will be huge.  Addressing the skills gap and embracing technology will help the industry fully realise the potential that exists for the immediate future.