Following a difficult period fuelled by issues like soaring material and energy costs, the past few months have offered several reasons to be positive about the outlook of the construction industry.
From a seemingly steady upward trajectory in terms of output to the new government laying out ambitious plans for major building projects, we’ve explored why things could be looking good for the industry.
Promising output figures shared by ONS
The sector continued to show encouraging signs of growth through June, with output estimated to be up by 0.5% according to the Office of National Statistics.
Driving this activity was new work (0.9%) and repair and maintenance (0.1%). Non-housing repair (3.2%) and new private commercial work (2.1%) saw the two biggest jumps in June. In total, seven of the nine construction sectors grew through the month.
There were more reasons to be optimistic heading into the second half of the year, with new orders in the construction sector growing by 16.5%. Private commercial and new infrastructure work were the standout categories in terms of upcoming projects, up by 15% and 23%.
The largely positive outlook was hedged slightly by the news that overall second-quarter figures from April to June were down by 0.1%, in comparison to the first quarter, though April’s poor weather could likely account for this small drop.
New homes accelerator to spur further growth?
The Labour Government has now unveiled plans for its New Homes Accelerator Plan, a scheme that should benefit the construction activity in the coming years.
According to the government, the initiative ‘aims to unblock and accelerate the delivery of housing developments that have for various reasons become delayed, or which are not progressing as quickly as they could be.’
To do so, the initial focus will be on large-scale housing developments currently facing significant delays or obstacles. Labour says the plan could lead to building 300,000 homes across 200 sites where work had been previously slowed or been postponed.
Richard Beresford, Chief Executive of the National Federation of Builders, welcomed news of the New Homes Accelerator Plan: “We are delighted that the Government have accepted our recommendations for it to play a greater role in overcoming local planning barriers.
“The New Homes Accelerator will play an overdue role in ensuring large scale development delivers more quickly, while informing their New Towns ambition and potentially serving as a catalyst for Homes England to be given greater strategic responsibilities.”
The New Homes Accelerator Plan forms a key part of the party’s manifesto promise to build 1.5 million homes in the next five years.
While there are longstanding issues that the industry must still cope with, such as ongoing skills shortages, there are plenty of emerging signs that point towards a strong, busy period ahead.