Construction predicted to reap a 13.7 per cent rise despite Material Shortages
Product and material shortages have caused a lot of problems for the construction sector over the past year. This is a situation that many thought would lead to either a shrinking or a lack of growth. However, that appears not to be the case. Now, new figures released by the Construction Products Association reveal a much brighter picture, with an upward revision of growth figures for this year and next.
An upward shift in predictions
The figures from the Construction Products Association are a pleasant surprise after many months of concern over the labour and product shortages that have been proving problematic for the construction sector in 2020 and 2021. The actual figures predict an increase in growth of 13.7% for this year and a further 6.3% in 2022. Both of these figures have been revised upwards by a percentage point from the numbers that were released a quarter ago. This is quite an achievement given that there is still the potential for shortages to get worse and that those who are able to find the labour and materials that they need are, on the whole, paying more for them. A 42% drop in EU construction labour over the past four years has not helped the situation and extended lead times for essential products, including paint, varnishes, timber and roofing materials have created real challenges. However, the Construction Products Association has said that these considerations have been factored into the figures, which still show substantial growth.
What’s the driving force behind construction growth?
According to the Construction Products Association, the key to the forecast figures will be the movement in infrastructure construction as well as private housebuilding – it’s these that are going to fuel the headline growth for the rest of 2021 and also much of the following year.
- Infrastructure is forecast to grow by nearly 24% this year, a figure that is being supported by huge projects currently underway, such as HS2. However, delays in these projects have reduced the forecasts for the infrastructure sector from figures released in the last quarter.
- In private housebuilding, a rise of 20% is forecast for the rest of this year and a further 9% next year. These figures come despite the changes that are being made by the government to the Help to Buy Scheme and the end of the stamp duty holiday. There is no doubt that the pandemic has had a pretty positive impact on private house building in areas outside of big cities, as more and more people looking to escape to the countryside and the coast to find more open spaces and a better quality of life.
One area that hasn’t fared so well is commercial construction, where growth has slowed considerably and doesn’t have the same positive forecasts – for this year at least.
Even though this has been a very challenging 12 months for construction, the forecasts for growth remain positive – and moving upwards, both for 2021 and the 12 months to come.