The construction industry will face near-term challenges, including slow economic growth and persistently high interest rates. This is according to Glenigans UK Construction Industry Forecast 2024-2026, which however expects the outlook to improve as the forecast period progresses.
Glenigan suggests that the new government, which has a substantial majority, is already reducing political uncertainty and restoring markets.
It goes on to say that policy decisions around construction projects are likely to be made at a faster pace, which will improve performance.
This points to a recovery in the not-so-distant future, with a modest increase in project starts forecast in the second half of 2024. This year, the increase will start at 3%. As the economy continues to improve in 2025, Glenigan predicts growth of 7% and 6% in 2026.
Commenting on the forecast, Glenigan economic director Allan Wilen said: “There are signs of growth, pointing to a gradual recovery. In the private housing sector, for example, we expect starts to pick up in the second half of this year, driven by improved affordability and a brighter economic outlook.”