Construction Sector ‘Will Return To Pre-Covid Levels By 2022’
Several major infrastructure projects which are in the pipeline are set to take the UK construction sector back to pre-Covid levels as soon as next year. New Civil Engineer reports that Glenigan’s 2021-2023 Construction Industry Forecast makes the prediction in new figures published on 6 July.
Glenigan also predicts that underlying starts (the forecast in which projects with a value in excess of £100m are removed to give a clearer picture) will be 3% above 2019 levels. The civil engineering and infrastructure sector in particular are thriving at the moment.
The report states: “Significant infrastructure schemes, such as Thames Tideway, HS2, Hinkley Point and the Stonehenge Tunnel will be important drivers for sector activity over the forecast period, with the value of underlying main contract awards rising steadily in recent months.”
The UK Government has announced £100bn capital spending plans for UK infrastructure projects for the next year, leading to high levels of optimism and confidence in the industry. The value of underlying work (less than £100m in value) grew by 27% in 2019, compared to the previous year.
With the impact of the pandemic disruption, underlying starts fell 15% in value, but major-project starts continued to perform strongly. Investment programmes are set to rise steadily during 2021, with a 21% increase compared to 2020. They are predicted to level off and dip slightly to -4% in 2022, before rising to +7% in 2023.
However, the current shortage of construction materials may hamper the speed of the recovery, Glenigan director Allan Wilen warned. There will be significant challenges with the supply chain, and also around adapting to more sustainable ways of working.
Despite this, there are plentiful opportunities, with projects such as the HS2 Phase 1, the Stonehenge Tunnel, and the second Road Investment Strategy (RIS2).
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