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Positive Forecast for 2024 

As we pass the halfway point of 2023, we naturally start to look forward to what the next year will have in store for the construction industry.  

It’s no doubt that the construction industry has felt the strain from external factors over the past couple of years. The ongoing conflict in Eastern Europe has caused material shortages, cost inflation, and, more recently, spiking interest rates, which have all contributed to a decline in economic growth. *4 

 However, a lot of this ‘slowdown’ appears to only be temporary with the UK construction market expected to grow by 12% in 2024 and a further 3% in 2025, according to Building and Land and Construction Digital. The industry is forecast for a strong bounce back as new opportunities appear in warehousing & logistics, office, and retail refurbishment, fit-out, and the repurposing of redundant commercial premises. *1,2 

Here is a quick rundown of a few sectors that are set to have a positive 2024: 

Residential Sector 

Despite the housing market's sharp fall during the first months of this year, this slowdown appears temporary, with a renewed project-starts recovery anticipated in the second half of the forecast period, rising 7% in 2024 and 8% in 2025, as household’s financial positions and UK economic prospects improve. 

Affordable housing project funding will likely improve in 2024, which will help the industry grow by 11% over the year. *4 

Industrial Construction

Following the pandemic, industrial project starts have seen a major uptick, mostly due to huge expansion in warehousing and light industrial projects. The industry will experience some consolidation in 2023, followed by a return to growth in 2024. 

Tax measures announced in the Spring Budget, aimed at winning back investor confidence, encouraging a demand revival for premises next year with a 20% predicted growth in 2024, and 6% in 2025. *4 

Civil Engineering

Overall, civil engineering starts are forecast to slip back 9% before returning to growth in 2024. 

The delivery of existing and planned major capital projects including HS2 (High Speed Rail 2), the Silvertown Tunnel, and Hinckley Point C will be the significant driver of sector growth over the forecast period. *4 

Private Sector

From 2024, the private sector is expected to start generating more opportunities. The underlying value of starts in the industrial sector is forecast by Glenigan to boom by 20% next year, fuelled by growth in the warehousing & logistics sub-sector. 
Major warehousing & logistics schemes identified in the construction pipeline by Glenigan’s industry analysis include a £500m railhead and logistics hub at Ravenscraig in Scotland and the £410 million Humber International Enterprise Park in Hull. *4 

Looking at the region's expected performance, the north is set to outperform London and the south, this reflects the shift in government funding and their policy towards ‘levelling up’. *3

Despite the challenges we have faced so far this year, the outlook for 2024 and beyond looks promising with a revival of the construction industry in several different divisions. Strong development pipelines for the industrial and retail market are already contributing to an increased demand due to the post-pandemic working practices and the shift in online retailing. Whilst material costs remain high, there seems to be stability in the coming months which will give clients and contractors more certainty during the forecast period and when planning their project costs. *2  

PSR Solutions work with 8 out of 10 of the top contractors across the UK and have access to a pool of high-quality candidates both on a permanent and freelance basis. We have been experts within the construction industry and built environment for nearly 20 years and recruit across 7 sectors including Building, Civil Engineering, Residential and Trades & Labour. *3 

If you’re looking for your next role or are seeking high-quality candidates, please contact our Head Office on 01785 715 505 or email recruitment@psrsolutions.co.uk. 

Statistics in this article have been sourced from: 

*1 Building and Land  

*2 Construction Digital  

*3 Glenigan 

*4 Property Reporter  


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