2023 saw economic challenges across the UK but how these have been felt has differed region to region. Looking ahead to 2024, what can the construction industry expect to see in the North?
Regional directors for Construction, Sarah Cooke and David Wingfield, give their thoughts on what will characterise the next 12 months and how our industry can capitalise on growth opportunities available in the region.
Global and national economic uncertainty continue to cause turbulence and clients are rightfully cautious about 2024.
Project starts have halved over the last year, causing a slowdown in activity. Predicted new housing starts are expected to drop to 107,000 in 2024, which is significantly less than the government target of 300,000 new homes per year.
However, I do expect to see the green shoots of recovery in the latter half of the year. Planning approvals are up by nearly a fifth (17%) indicating that there is some confidence returning to the market.
Inflation has started to decline at an accelerated pace, some material costs are coming down and we should see a reduction in the base rate next year.
The skills gap continues to concern contractors, with one in five UK-born operatives are now over the age of 55. Given this, I’d like to see more industry/education partnerships to support T-Levels, apprenticeships, and work experience.
Based on the contracts we have secured for 2024, I am optimistic for the year ahead. But we need to focus on the here and now, establishing true collaborative partnerships with our clients and supply chain to get projects onto site. If we can achieve this, 2024 and beyond is looking pretty good.”
Regional Director for North West, Construction
A perfect storm of hyperinflation, interest rate rises, Brexit, and Covid-19 amongst others has created one of the toughest years for our industry. This has resulted in the fastest rate of insolvencies in over a decade which I predict will become an even larger issue in 2024.
To create a more sustainable industry for all, industry players need to adopt the principles of the Construction Playbook, including bidding with fair margins, committing to prompt payment of the supply chain and conducting improved financial assessments.
Given this ongoing instability, as well as the additional potential upheaval of mayoral elections in May, staff retention and competition will be increasingly important. As a business, we will continue to invest in skills and development, but beyond this we are also closely examining how we create high performing teams by examining the cognitive diversity of our teams and assessing how they best work together.
As a robust business with a strong track record across the region, we are confident in our prospects for 2024. In particular, our partnerships with long-term clients such as MEPC, Leeds City Council and Teesside University are set to continue and with this commitment allow us to invest even further in our market leading CSR offer.”
Regional Director for Yorkshire and the North East, Construction