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UK Construction Industry Prospects and Challenges: Insights from Allan Wilén

On October 23, 2012, Allan Wilén, Economics Director, presented a comprehensive overview of the UK construction market's conditions post-recession. The presentation addressed the significant downturn in private sector construction experienced in 2008 and 2009, followed by gradual recovery despite persistent public sector cuts. Emphasis was placed on the role of government-funded work, the shift towards infrastructure projects, and the impact of consumer confidence on private housing and office construction. Key challenges included taxation, inflation, and restricted bank lending.

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UK Construction Industry Prospects and Challenges: Insights from Allan Wilén

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Presentation Transcript

  1. UK Construction Prospects Presented by: Allan Wilén, Economics Director Date: 23rd October 2012

  2. MarketConditions • Double dip recession • Sharp falls in private sector construction in 2008 & 2009 • Renewed pressure from public sector cuts in 2011 & 2012 • Gradual private sector recovery

  3. Construction’s clients • Government funded work has supported output • Recession hit private sector workload hard • Private non-residential building still a third of output • Private housing stabilised • Infrastructure & Utilities growth sectors

  4. Government Policy: Key Department Spending

  5. Government Policy • Looking to private sector investment to lead recovery • Government prioritising investment in infrastructure • Value of publicly funded new builds to fall over coming years • Focus on refurbishment and improvements • Return of PFI to bridge the gap

  6. Social Housing

  7. Education

  8. Brighter Consumer Prospects? • Consumers hard hit since 2007 • Households hit by: • Weak earnings growth • Tax rises • Higher inflation • Debt levels remain high • Uncertain employment prospects • Restricted bank lending • Improved consumer confidence from late 2012? • Lower inflation • Moving out of recession

  9. Housebuilders revisit sites

  10. Private Housing • Sharp fall in project starts during 2008 & 2009 • Hesitant recovery in 2010 faded last year • Positive start to 2012 • Further recovery anticipated • Gradual rise in household incomes and confidence • Improved mortgage finance availability • Government initiatives to lift market

  11. Office Construction

  12. Industry Prospects • Public sector squeeze as capital funding cut • Slow private recovery • Offices, retail and industrial upturn • Increase in private housing starts • Private sector recovery hampered by access to capital • Improved consumer confidence • Refurbishment & retro-fit • Regional divide

  13. Customer Satisfaction

  14. On time & to budget

  15. Any Questions?

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