News & Events
18th March 2016
In 2015, commercial construction and refurbishment projects totalled Â£24.8bn, helping the construction industry achieve its longest period of growth for more than seven years. This coupled with sustained improvements in UK economic conditions has created a positive outlook for the years ahead, with construction output set to grow by 3.6 per cent this year and 4.3 per cent in 2017.
Following years of uncertainty, the future of the construction industry looks optimistic, much of this due to a strong performance from commercial building, which flourished in 2015. Added to this, it is expected to grow by 7 per cent in 2016, resulting from a strong pipeline of commercial development projects. Consequently, this positive forecast is providing a boost to the wider economy with a UK GDP growth set to average around 2.4 per cent in 2016.
According to JLL and Glenigan’s Commercial Construction Activity Index, commercial construction continues to increase. This results from the major urban centres outside London, including Scotland, Yorkshire and the North West, beginning to bounce back following the government’s initiative to boost the North East economy. Subsequently, construction industry continues to grow at a healthy pace, increasing business confidence when setting budgets and planning for the future.
It is the demand for commercial projects that has led to an increase in job creation. Tim Moore, senior economist at Markit, described the pace of jobs growth as “the most intense cycle of job hiring for at least 15 years”. This coupled with the government’s vision for the construction industry to grow by over 70 per cent by 2025 has increased general market confidence even further.
With a 6.7% share of the economy overall, construction “is continuing to act as an important driving force behind the on-going UK economic upturn”, explains Tim Moore, Senior Economist at Markit. He continues “with firms mainly citing a strong pipeline of commercial development projects”, commercial building will continue to have a positive impact on the construction sector. Depending on the availability of finance as well as government policy and expenditure, construction outlook is looking very promising for 2016 and beyond.