Glenigan, one of the construction industry’s leading insight and intelligence experts, releases its widely anticipated UK Construction Industry Forecast 2024-2026.
The key takeaway from this Forecast, which focuses on the next three years (2024-2026), is that the outlook brightens over the forecast period. The early election will reduce political uncertainty, while a strengthening economy is expected to boost consumer and business confidence from H2 2024.
This signals recovery in the not-so-distant future, with a modest increase in project-starts predicted in the latter half of 2024 lifting starts by 3% this year. As the economy picks up further in 2025, Glenigan forecasts 7% growth, and 6% in 2026.
Starts on the up
An easing in borrowing costs and improved economic conditions – with the UK economy forecast to grow around 0.8% in 2024 – together with greater political certainty, should help to lift investor confidence from the second half of 2024 and into next year.
Despite a tough start, renewed growth in project-starts is forecast for H2 2024. The gradual easing of interest rates is also expected to feed through to lift housing market activity from the second half of this year.
Commenting on the Forecast, Glenigan’s Economic Director Allan Wilen says, “There are signs of growth in several key areas, particularly in the private verticals, signalling a gradual recovery from mid-2024. In the private housing sector, for example, we anticipate starts will pick up in the latter half of this year, driven by improved affordability and brighter economic prospects.
“Similarly, we’re forecasting improved activity in consumer-related verticals such as retail and hotel & leisure, as a gradual easing in price inflation is set to provide a boost to households’ spending power. Elsewhere, structural changes are expected to create new opportunities in office refurb and fit-out.
Private housing set to rebound
Glenigan is predicting a 2% rise in 2024 as the market environment gradually picks up. An increase in mortgage approvals in March 2024 (the highest in 18 months) points to a strengthening in house sales in the coming months.
Renewed project-starts recovery is also anticipated in the second half of the forecast period, rising 14% in 2025 and 6% in 2026, as interest rates dip and consumer confidence improves.
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