Jane Embury looks at what might be in store for 2022
It’s been a turbulent two years for the construction sector, but there are reasons for cautious optimism.
The Glenigan UK Construction Industry Forecast 2022-2023 says that the value of underlying project starts is set to rise 7% in 2022 and by a further 5% in 2023.
Moreover, 2022 is set to see a return to pre-COVID levels, with underlying project starts up 3% on 2019 levels.
However, the Construction Products Association recently revised its growth forecast for 2022 down to 4.8% because of supply chain issues.
As all major house builders continue to report that demand in the housing market and house price inflation continues to be robust, CPA forecasts house building starts to rise by 9.0% in 2022.
This is underlined by PwC which says that by the end of 2022, the UK economy is likely to be roughly 1% to 2% above pre-COVID levels.
The CPA, among others, believes the biggest issues are the cost and availability of imported products and skilled labour.
Supply chain issues will particularly impact small firms which have less resource to plan and purchase in advance.
For some industries, energy costs are a major factor, and there remains considerable volatility in energy pricing.
But it’s not just construction that is seeing rising demand. For example, the commercial fit-out sector, as offices are being remodelled for a new kind of hybrid working, with staff only in the office for a few days each week.
In turn, working from home means there are relatively few new office tower schemes on the horizon.
The retail sector is also under stress, with the acceleration of online trading. That trend towards greater digital purchasing is not going to go away.
As we’ve said many times, local and national government must give urgent thought to our urban spaces. High streets are important and must remain viable.
In the advanced glazing sector, our external and internal systems will continue to find markets here and internationally. Post-Grenfell, fire safety is now a top priority for building owners and designers.
While there remain headwinds, we start 2022 with greater optimism than we started 2021, and for that we should be grateful.