In today’s news, as the year 2025 draws closer, surveyors in the United Kingdom are forecasting that the construction industry will have a prosperous future. Meanwhile, as the expansion of the construction industry slowed down in October, corporate optimism about the future of the sector reached a level that had not been seen in 10 months. The findings of the study will also be presented at a conference in the United Kingdom by the Construction Plant-hire Association. Also, STRABAG UK has appointed a new head of pre-construction for the company.
Surveyors Predict 2025 Construction Growth
Original Source: Surveyors Expect 2025 Growth for Construction Industry
As we approach 2025, surveyors in the UK are predicting a bright future for the building industry.
A net balance of +28 indicates that members of the Royal Institution of Chartered Surveyors (RICS) anticipate a rise in workloads over the next 12 months, according to the study. This is in line with attitude from the previous quarter and shows that the industry is still quite optimistic about its future growth.
The infrastructure industry, in particular, is anticipated to take the lead with vigor. A net balance of +30 of respondents expect infrastructure development to see increased activity, which is slightly lower than Q2’s expectations.
A significant increase in confidence has been observed in the private residential sector, with +26 of participants projecting growth. After an average of 12% over the previous four quarters, this is a substantial improvement. Furthermore, with a net balance of +17 respondents, private non-residential construction is expected to gain momentum.
Employment
The most depleted roles currently in the sector, according to respondents, are bricklayers (37%), carpenters (33%), and plumbers (33%). One of the main problems limiting construction activity was the shortage of general labor, which was cited by 44% of the population.
Still, things appear good in the job market overall. Just over one-eighth of those who took the survey expect employment to rise in the coming year.
Among the top factors restricting activities, financial restrictions were mentioned by 61% of the participants. There is still a generally restricted credit environment, so this outlook makes sense. Still, with policy interest rate decreases in the works for next year, things could look up a little. On the whole, 11% of people who took the survey anticipate that lending standards will be relaxed.
This data shows some promising indications of progress for the UK construction industry as we approach the end of the year, according to Tarrant Parsons, a senior economist at RICS.
Although there seems to be an improvement in growth prospects for the next twelve months, there are still hurdles to overcome. These include persistent skills shortages and the industry-wide issue of narrow profit margins. In the coming year, experts in the field expect credit conditions to improve, which will give confidence a much-needed boost.
Ten-month Low Construction Growth Confidence
Original Source: Confidence in construction growth at ten-month low
As the construction industry’s growth slowed in October, business optimism about the sector’s future hit a ten-month low.
After reaching its strongest pace in almost 2.5 years last month, total business activity growth in the UK construction sector for October 2024 has decreased.
October saw a decrease from 57.2 in August to 54.3 on the S&P Global UK Construction Purchasing Managers’ Index (PMI), which monitors changes in overall industry activity.
The index, however, remained above the no-change threshold of 50.0 for the eighth month in a row.
The most recent figure also indicated a substantial increase in overall industry activity, as it was significantly higher than the average from the first half of 2024 (51.4).
With a score of 56.2, civil engineering was the top performing category of construction output in October. This was mainly because there was a surge in demand for projects related to energy infrastructure, particularly renewable energy.
October saw growth in commercial work as well (52.8), however it was the most modest gain since the expansion started in April.
With a total production decline of 49.4 in October, home construction was the lone broad category of construction work to see a drop in activity since June.
Companies in the construction industry have noticed that demand has been limited due to elevated borrowing prices and uncertainty around the Autumn Budget.
Orders placed for new products and services increased steadily in October, but they were lower than the two-and-a-half year high seen in September.
Factors restricting new order growth in October included political uncertainty and decreased household demand caused by cost-of-living constraints.
The pace of job creation advanced to a three-month high, and many construction companies reported good sales pipelines and tender chances, which they attributed to generally improved domestic economic circumstances.
October saw a slight improvement in suppliers’ delivery schedules as well, bringing the total number of months in which lead times have been reduced to three.
Construction companies’ confidence in their output growth estimates is at its lowest since December 2023, despite the fact that construction output has mostly remained stable. As a result, business optimism has fallen to a ten-month low.
The construction sector continued its good output increase in October, although it was unable to equal the highs achieved in September, according to Tim Moore, Economics Director at S&P Global Market Intelligence.
Once again, civil engineering work was the leader in business activity expansion. A large number of survey takers noted the high level of interest in renewable energy infrastructure projects.
Commercial building activity likewise picked up steam, but at its slowest rate since the expansion’s current phase started in April.
“Although demand was helped along by improving domestic economic conditions, some construction companies did report that spending decisions were delayed in the lead-up to the Autumn Budget.”
Thomas & Adamson’s technical director, Jordan Smith, commented on the Index’s results by saying that people are being cautious in the lead-up to the Autumn Budget, but that industry growth is still bouncing above the no-change level.
Even though the PMI fell in the third month of the year, it is still much higher than the average from the first six months, according to Smith.
The residential sector witnessed a decrease in housebuilding due to the shifting economic backdrop, while infrastructure and commercial activity continue to be robust.
Project risk can be mitigated through proactive supply chain management, which is crucial for delivering successful projects despite improving lead times. Careful preparation regarding procurement and material delivery timeframes is essential.
What happens to the market as a result of the Chancellor’s new policies next week is something to watch with interest.
“Even though job creation is at a three-month high, small businesses are facing new challenges, such as the potential impact of changes to employers’ National Insurance contributions on new job opportunities.”
Study Results to Be Revealed at UK Conference by Construction Plant-hire Association
Original Source: Construction Plant-hire Association to unveil study findings at UK conference
“Shaping the Future: Insights for the Plant-hire Sector” is the topic that will be discussed at the CPA Conference, which will take place on Thursday, November 7th, 2024, in the Heart of England Conference and Events Centre, which is located somewhere close to Coventry.
The first panel session of the day is themed ‘The Plant-hire Sector in 2024’ and speakers Chris Cassley, policy manager at the CPA, and Jamie Charles, lead economist at Oxford Economics, will provide attendees an insight into the conclusions of the study.
To assess the breadth and depth of the UK plant-hire industry, the CPA hired Oxford Economics to conduct research and prepare the study. Anyone involved with the industry, from workers to lawmakers and stakeholders, will find it an engrossing read. Also, it’s useful for seeing the big picture of the industry and why it’s still a hotspot for people with advanced degrees and professional experience.
In their study titled “The Economic Impact of the UK Construction Plant-hire Sector,” CPA and Oxford Economics came to the following important conclusions:
A yearly £14 billion is added to the UK economy by the construction plant-hire sector.
An estimated 191,500 people in the United Kingdom rely on construction plant-hire services.
Construction plant-hire supports a total of £218 in the economy for every £100 that it contributes to GDP directly.
There is a higher concentration of managers and directors among construction plant-hire employees, which accounts for their 16% higher productivity compared to the average UK worker.
There are 216 indirect employment supported by the construction industry for every 100 direct jobs.
“This research has been carried out over many months and we are excited to share the findings for the first time at the CPA Conference,” stated Steve Mulholland, chief executive officer of the CPA. In addition to highlighting the plant-hire sector, the report provides an opportunity to reflect on recent achievements and the impact of CPA members on the UK economy as a whole.
Businesses that provide plants for hire have had to change and adapt in recent years if they want to stay in business. Opportunities, progress, new technology, and inventions abound in the future that we can see. Policymakers have prioritised decarbonisation and the transition to a net-zero economy. Our sector must contribute to this effort as the transition away from diesel and fossil fuels gains momentum. Companies that provide plants for hire will feel the effects of this and other technological shifts in the next decades.
As we tackle these future opportunities and challenges, the CPA’s role will also change to accommodate our members. As the CPA celebrates 90 years of service to the UK’s construction plant-hire sector, this economic impact research lays the groundwork for future endeavours in all areas of our work and participation. Our members’ contributions to our ongoing success are the sole reason it has been feasible.
‘The Economic Impact of the UK Construction Plant-hire Sector,’ a report co-authored by CPA and Oxford Economics, is available at the CPA Conference for those who wish to obtain a copy.
The Head of Pre-construction at STRABAG UK has Been Appointed
Original Source: STRABAG UK appoints new head of pre-construction
Marcus Reeve was a senior pre-construction manager at McLaughlin & Harvey for over a year before he joined the company.
He had previously spent about a year at Buckingham Group in the role of pre-construction manager; he had previously spent almost three years at Balfour Beatty, most recently in the role of work-winning director.
Reeve was a senior procurement and pre-construction specialist at Willmott Dixon for thirteen years before joining Balfour.
In the ’90s, he was also a quantity surveyor with John Laing Partnerships.
Announcing his new role as head of pre-construction at STRABAG UK, Reeve took to social media to share the good news.
At STRABAG UK, Reeve is now in charge of the pre-construction teams, where he will work to keep external connections strong while delivering lucrative, de-risked bids.
The promotion of STRABAG UK from sub-division to division, making it the twelfth working division of the STRABAG Group, and his appointment occur at the same time.
More than 86,000 individuals work for STRABAG, making it the fifth-largest construction company in Europe.
After establishing ourselves in the UK over the past decade, STRABAG UK managing directors Simon Wild and Andrew Dixon described this as a huge step forward in expanding their regional footprint.
Consistent revenue growth and remarkable milestones attained on our key projects are proof that the hard work of our colleagues has been the engine that has kept us growing and succeeding in recent years.
“Now that we’re a part of STRABAG, we’re going to crank up our tunnelling, industrial/logistics, and civil engineering projects, and we’re speeding up our plans to join the energy and secure sectors in the UK.”
Summary of today’s construction news
Overall, the study found that members of the Royal Institution of Chartered Surveyors (RICS) expect their workloads to increase over the next 12 months as the net balance is +28. This confirms the industry’s continued optimism over its future growth and is consistent with sentiment from the previous quarter. Meanwhile, overall business activity growth in the UK construction sector for October 2024 has slowed down after reaching its best pace in nearly 2.5 years previous month. S&P Global UK Construction Purchasing Managers’ Index (PMI) fell from 57.2 in August to 54.3 in October, tracking changes in industry activity as a whole. In addition, the CPA also commissioned research and analysis from Oxford Economics to gauge the size and scope of the plant-hire market in the United Kingdom. This book is a must-read for everybody with a stake in the sector, whether they are employees, legislators, or stakeholders. It helps to understand the sector as a whole and the reasons why it continues to attract highly educated and experienced individuals. Also, prior to joining the company, Marcus Reeve worked for McLaughlin & Harvey for more than a year as a senior pre-construction manager. Prior to this, he worked for over three years at Balfour Beatty, most recently as work-winning director; he also spent around one year as pre-construction manager at Buckingham Group.
