UK Construction Summary

(May 2023)

The UK construction industry is a vital part of the economy, contributing £130 billion to GDP and employing over 2.5 million people. However, the industry is facing a number of challenges, including rising costs, labour shortages, and changing regulations.

One of the biggest challenges facing the construction industry is the rising cost of materials. The price of steel, timber, and other materials has increased significantly in recent years, putting pressure on margins for construction companies. This is particularly evident in the housebuilding sector, where the cost of materials accounts for a significant proportion of the overall cost of a new home.

Another challenge facing the construction industry is the shortage of skilled labour. The UK has a long-standing skills shortage in the construction sector, and this is only getting worse. The number of people leaving the industry each year is greater than the number of people entering, and this is leading to a growing skills gap. This is particularly evident in the housebuilding sector, where the demand for skilled workers is outstripping supply.

The construction industry is also facing a number of regulatory challenges. The UK government has introduced a number of new regulations in recent years, which have added to the cost and complexity of construction projects. This is particularly evident in the housebuilding sector, where the government has introduced a number of new regulations aimed at improving the quality of new homes.

Despite the challenges, the UK construction industry is still expected to grow in the coming years. The government has set a target of building 300,000 new homes per year by 2025, and this will require a significant increase in construction activity. The industry is also expected to benefit from the government’s investment in infrastructure projects, such as HS2 and the Northern Powerhouse Rail.

The following are some of the key trends that are expected to shape the UK construction industry in the coming years:

The increasing use of technology: The construction industry is increasingly using technology to improve efficiency and productivity. This includes the use of drones, 3D printing, and BIM (Building Information Modelling).
The focus on sustainability: The construction industry is increasingly focused on sustainability. This includes the use of green materials, energy-efficient construction techniques, and water conservation measures.
The growing demand for modular homes: Modular homes are prefabricated in factories and then transported to the construction site. This can significantly reduce the time and cost of construction.
The rise of offsite construction: Offsite construction involves carrying out some or all of the construction process offsite, such as in a factory. This can also significantly reduce the time and cost of construction.

The UK construction industry is facing a number of challenges, but it is also expected to grow in the coming years. The industry is likely to benefit from the government’s investment in infrastructure projects, the increasing use of technology, and the focus on sustainability.