There is a high level of optimism for performance in 2021 that reflects the secured order books that are giving businesses some near-term security, these are the findings of our latest survey and report on the construction industry.
The report also provides you an opportunity to benchmark your business against others, while also offering some suggestions for enhancing resilience and improving performance.
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Key trends in construction; challenges and opportunities ahead
But what does the longer-term future hold? Key trends from the report suggest many are worried to some extent about supply chain failure and a third are experiencing issues obtaining funding. Many respondents said that skilled labour shortages were not only an industry-wide challenge but also a concern for their own business. Productivity, the skills gap, the regulatory and political environment and domestic supply chains were further areas of concern.
Construction output in November 2020 was finally back to the levels of February 2020. Subsectors such as infrastructure, private housing, repair and maintenance and fit out have done particularly well. New build, accounting for 60% of construction sector output, has grown by 3.5%. However, private commercial has found the going relatively tough.
Like all sectors, construction felt the impact of COVID-19 in 2020. The first UK lockdown in March and April 2020 caused a dramatic fall in construction output. However, with construction and manufacturing allowed to continue through subsequent lockdowns, the sector has rebounded. Government initiatives, including the “Build build build” campaign and the temporary zero stamp duty on house purchases under £500,000, have played a part.
The importance of a healthy construction sector is clear. Construction accounts for 7% of UK GDP and 10% of total UK employment. Looking ahead through 2021 and beyond, maintaining a strong and vibrant construction industry will be vital for driving the UK’s economic recovery.
About our survey
In January 2021 we ran an online survey of construction sector businesses. Respondents came from across the UK, operating in a variety of construction subsectors, including mainly privately-owned but also publicly listed companies. Participants included chief executives, managing directors, finance directors and other senior finance and business personnel.
Webinar: The future of UK construction in 2021 and beyond
On 11 February 2021, our Real Estate and Construction team hosted a webinar looking at the future of UK construction in 2021 and beyond, based on the findings of our recent industry survey. During the webinar we discussed how the industry can become more resilient and looked at practical measures companies can take to mitigate some of the challenges they are facing, particularly around managing uncertainty, supplier and contract management and tax. We were delighted to be joined by Jon Wardle, CEO of Claritas who gave us his viewpoint from industry. Watch the recording below.
Watch the webinar