What to look out for across the Construction Sector in 2023
Much like the remainder of the UK economy, there is anticipation and question marks over the Construction sector and how it will face the predicted recession and increasing interest rates, labour shortages, and inflation. Although some areas of the industry may fall victim, some forecasts are not looking as dramatic as expected and will be driving the forever resilient industry through the potential hardships. If you’re looking to kickstart your career in Construction or fancy a change in sector, keep reading as we discuss the most promising markets of the Construction industry this year.
Civils & Infrastructure:
Whilst the private sector may be facing the worst of it, infrastructure output is forecast to rise by 2.4% in 2023 and 2.5% in 2024 and is currently at historic high levels of activity. As part of the UK Growth Strategy, the Government is heavily funding infrastructure projects this year, including 86 road schemes and investment in rail and utility projects. Alongside this, works on major infrastructure projects such as Hinckley Point C and HS2 are continuing and proving to be the support structure for the industry. This is looking to continue throughout the year with the £24bn. investment into RIS2 and with hopes of the Autumn Statement from the Government to continue delivering these projects.
With the government utilising capital investment as a driver for growth, it is expected that existing construction plans will be honoured in the Spring Budget. Part of this being the investment from the Department of Education into the education sector, with 400 schools looking to be rebuilt over the next decade, with further investment expected in line with the Spending Review. Additionally, the number of students projected to attend UK universities in the next few years has bolstered investor confidence in the student accommodation sector, resulting in a projected growth in the construction of new and remodelled accommodation facilities.
Although COVID feels like a lifetime ago, some sectors have taken a few years to recover but are anticipated to rapidly grow in 2023. One such sector is Offices, which following the return of people back into the office environment as opposed to isolation or working from home, has seen delayed office new build and refurbishment projects start up again. The pandemic has also resulted in a new working style adopted by many office based businesses resulting in a ‘hot desking’ or collaborative environment for which there is an increase in office remodelling projects. On the flip side, following the pandemic some workers have chosen to adopt the hybrid lifestyle resulting in less floorspace needed and freeing up the opportunity for office refurbishments. Overall, the effect of the pandemic on office space has generated an increase in construction projects in this sector, up 5% in 2023.
To summarise, the most promising outlook for the construction industry lies within government funded sectors as opposed to the private sectors. With these promising insights into projected growth in these areas, the overall consensus is that the construction market will push through 2023 on the back of government funded projects. Whilst 2024 is anticipated to bring recovery to the wider construction market, with 1% growth projected and the recovery of more sectors. If you’re looking to move your career within the construction industry, there are plenty of promising areas in which to do so this year.