2020 – Five Positives to Expect in Construction
Following a turbulent and uncertain few years in both the construction sector and the UK, 2020 shows signs of positive change. Here are five key areas One Guarantee believes show promise in the construction industry:
1. Contract award values increase
2019 finished with a strong increase in the value of all construction award contracts indicating a confident change in direction for 2020. Contract values in November were £5.4 billion based on a 3-month rolling average; an increase of 9.1% on October and increasing further to 20.2% compared with November 2018. The residential sector was the best achiever in November with share of 38.1% which compares to just 28.0% share of awards in October.1 These increases place the industry on a strong platform for this year.
2. Increased government focus for housebuilding
In an effort to get back on track towards its target of building 300,000 new homes per year, the UK can expect greater efforts to meet these targets under the government’s ‘infrastructure revolution’. This effort cannot be met by volume house builders alone, the support of small and medium sized (SME) house builders across the country will be vital to achieving this.
3. Revival in buyer confidence
Aided by a resurge in buyer confidence, the value of private housing is set to rise by 9% in 2020 to £19.3 million and increase by a further 10% in 2021. This coincides with a recent HBF Housing Pipeline report, which showed that despite 2019’s uncertainties, the housing market is set to continue growing.
4. Rise in private rental development
Build to Rent construction activity is set to continue growing over the next couple of years, now that the threat of new regulations and rent controls under a Labour government has receded. In Brighton for example, work is set to start next spring on Legal & General’s £80 million ‘New England Quarter’ private rental scheme involving 208 flats along with further elements of mixed use.2
5. Sector employment growth
Employment indicators suggest that the number of workers in the construction industry is set to rise from 2020 onwards. Approximately 168,500 construction jobs are to be created over the next five years, which represents 10,000 more than in 2019’s forecast. Construction employment is expected to reach 2.79 million by 2023.3
One Guarantee provide structural warranties and latent defects insurance for residential and commercial property throughout the UK. For more information on our range of structural warranties, please get in touch by calling 01603 218288 or email us.
1 Barbour ABI, Economic & Construction Market Review: www.barbour-abi.com/economic-and-construction-market-review/
2Glenigan, 2020-2021 Construction Industry Forecast: www.glenigan.com/2020-2021-construction-industry-forecast/
3 PBC Today: www.pbctoday.co.uk/news/planning-construction-news/uk-construction-growth-brexit/52966/