Recovery isn’t just confined to the traditional centres of the London and the South-east - it is being replicated in each and every part of the country
2014 is going to be an interesting year for the construction industry. In the press over the last few years all we’ve heard about is job cuts, profit warnings and flatlining workloads. From the largest multinational firms to the smallest microbusinesses it’s been a tough few years to say the least. It’s now a very different industry to the one we were operating in eight or nine years ago and when you look at the figures, it’s easy to understand why.
Right across the world, over 70% of wealth is tied up in property. This is precisely why when the nation’s economy starts to struggle, so too does the construction sector and vice versa. Since the downturn hit the UK back in the autumn of 2007, the prospect of lower financial returns in western economies has again led investors and firms to look overseas to the likes of India, China and the Middle East.
Our members are telling us that workloads are rising right across the housing, commercial and infrastructure sectors
That said, with the big parts of the West slowly emerging from the economic downturn and the UK economy, in particular, performing ahead of expectations, opportunities for the construction sector here at home are starting to look more positive than at any point over the last few years. Our members are telling us that workloads are rising right across the housing, commercial and infrastructure sectors. More importantly, though, this isn’t just confined to the traditional centres of the London and the South-east, but is being replicated in each and every part of the country.
In fact, as we enter the new year, there are an incredible amount of opportunities out there in the UK for firms of all sizes. HS2 has been given the green light, demand for housing is on the up and overall infrastructure spending is a stated priority for the government. Such is the potential for infrastructure, we have even met market demand and readdressed our pathways into the profession. Thanks to contributions from employers and the industry, we recently launched the infrastructure pathway to RICS professional qualification which will assist the next generation of chartered surveyors in their careers.
On a more general note, we also expect overall GDP to rise to somewhere in the region of 2.7% this year, which bodes well for the sector over the coming 12 months. Additionally, with demand for housing increasing so steadily in recent months, we also expect construction to increase in order to meet this. Our prediction for housing starts is a rise of around 30,000 on last year’s total, once again, with projects spread throughout the country.
All in all, it feels now that we are starting to see the light at the end of the tunnel. Although there is still a long way to go in terms of the economy, and we need to ensure that the recovery is not just a strong one but also a balanced one, with each and every part of the country participating in the upturn. That said, though, I think we can take some comfort in the fact that things are getting better and 2014 could, in fact, prove to be a positive year for the construction sector.
Sean Tompkins is chief executive of the RICS