Consultant expects current recession to be short-lived

Turner & Townsend is telling its clients to start proactively planning for a resurgence in construction activity, while also revising up its inflation forecasts for the UK industry.

The business has increased its 2024 tender price inflation forecast for real estate to 3.2%, up from the 2.7% it previously predicted in December.

For infrastructure, the forecast remains at 4.5%, although this is lower than 2023’s 5.5% and 10% in 2022.

Martin Sudweeks 2023

Martin Sudweeks said clients needed to secure supply chains ahead of an expected increase in work

T&T said it expected the current recession to be short-lived and shallow, with confidence and investment increasing as the Bank of England cuts interest rates in response to overall falling inflation.

It said clients needed to secure their supply chains for upcoming jobs to make the most of positive conditions.

And it added they needed to carry out “robust procurement and pre-qualification checks to minimise the risk of contractor insolvencies impacting programmes”.

T&T’s UK managing director for cost management, Martin Sudweeks, said: “There is plenty of room for optimism in 2024. Even as we head into a period of political and economic unknowns, built asset investment decisions are now being made, not delayed.

“This is not to say we’ve got an easy ride ahead of us. We still face structural issues, particularly the pressing skills shortage.”

Earlier today, the ONS said construction grew 1.1% in January, helping overall GDP rise 0.2% in the first month of the year.