Resilience to recovery: The future of UK construction
Resilience to recovery: The future of UK construction
A regional outlook
Michelle Elliot, Partner in Glasgow: “It will take months, if not years, for the full impact of these headwinds to play out. That being said, Scotland’s construction sector has always shown itself to be tenacious and creative in finding solutions to persistent challenges – and our findings show this tenacity in action.” Scotland
North West
East Midlands
South West
Simon Farr, Director in Manchester: “There are some real positives in our findings, including the fact that the majority of the North West construction sector expects to see both revenue and profitability increase this year. But at the same time, any improvements here may be overshadowed by the sheer force of pressure firms are under.”
Matt Whitchurch, Partner in Bristol: “While it’s positive that the South West is the most optimistic part of the UK when it comes to the construction sector’s outlook, these figures are still highly concerning in the wider context. They reflect the significant, sustained effect of a perfect storm of pressures – from raw material inflation to elevated interest rates.”
Nathan Jones, Partner in Leicester: “The results across the Midlands are concerning, but particularly so in the East. It’s possible that what we’re seeing here in terms of splits in trading optimism, and revenue and profitability expectations are the knock-on effects of the decision to cancel the eastern leg of HS2.”
North East
Mark Hodgett, Partner in Leeds: “ Construction is one of Yorkshire’s most important sectors, both forming a significant part of the economy and underpinning the region’s ambitious development pipeline. For this reason, it’s concerning to see that such a high proportion of businesses are worried about the months ahead.” Yorkshire & The Humber
London
East of England
Allan Kelly, Partner in Newcastle: “Construction is a significant part of the North East’s economy, which makes these results all the more concerning. Many construction businesses were already strained by the disruption of the pandemic. Rising interest rates, surging inflation and weakened demand have taken a further toll.”
Richard Bloomfield, Director in Norwich: “These are incredibly concerning findings, and reflect the sustained pressure that the construction sector has been under. Factors like raw material price inflation, supply chain disruption and heightened interest rates have combined with heavy debt loads to stretch firms’ bottom lines.”
Justin Matthews, Partner in London: “High interest rates, weak economic growth, persistent inflation, supply chain disruption and delays or cancellation to infrastructure projects have exacerbated strain caused by existing, heightened levels of pandemic-era debt, testing business’ resilience to the limit.”
West Midlands
South East
Gemma Jones, Partner in Birmingham: “There are economic bright spots on the horizon, although challenging factors – like high interest rates and heightened input costs – are likely to persist in the short-term. That being said, it’s encouraging to see that sentiment in the West Midlands is broadly in line with the national average.”
Phil Harris, Partner in Brighton: “It’s unsurprising to see that such a large proportion of the South East’s construction businesses have concerns. However, with inflation continuing to ease – aided by the reduced energy price cap coming into force in April, there is a light at the end of the tunnel for those that have weathered the storm.”
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