UK construction market outlook report – July 2024
31 July 2024
In the wake of the Labour Party’s recent victory in the general election, the UK construction industry stands at a critical juncture. Currie & Brown’s latest construction market outlook report reveals a wealth of opportunities and challenges as the sector navigates a new political landscape poised to drive economic expansion.
By using her first speech as chancellor to announce a suite of planning reforms, Rachel Reeves addressed one of the main obstacles to growth and demonstrated a willingness to act. Whilst this was a positive step, her subsequent statement on 29 July 2024 cancelled several major infrastructure projects and cast doubt over the future of the New Hospital Programme (NHP).
Our latest report discusses the importance of a stable economic and political environment to attract private investment, drive growth and balance fiscal responsibility.
Key insights from the report
- Economic indicators: construction output saw a decline of 0.6% between Q4 2023 and Q1 2024, but growth is anticipated to resume in 2025. Public sector investments in health, education, and infrastructure are pivotal to this recovery.
- Private investment: easing inflation and prospective interest rate cuts are likely to stimulate significant private investment, revitalising projects that have been delayed.
- Innovation and regulation: The industry must adapt to forthcoming regulatory changes and embrace technological advancements to enhance productivity and address critical challenges.
- Labour shortages: As previously reported, the sector faces a pressing need for skilled labour to meet the government’s ambitious housing and infrastructure targets.
Forward-looking projections
Our five-year tender price forecast (2024-2028) anticipates a dip in output this year, with modest growth expected in 2025 and a robust recovery from 2026 onward. This projection underscores the need for long-term stability and strategic planning within the construction industry.