Upon reflection, 2013 was a year of hard work within the construction industry which reaped a little more benefit that hadn't been seen in recent years. The economy is showing signs of improving which is fuelled by the foreseen growth in the construction industry. Early signs are indicating that 2014 is going to be the best year seen since 2009 when the economic downturn began.
So what should the construction industry expect in 2014? We take a look at the anticipated high and low points expected for this year.
The good news
This is great news for both electrical contractors and sub-contractors. There will be more opportunities for fitting out retail and office premises. The retail focus on 2014 will be more small scale refurbishment work and fewer large scale projects. With consumer confidence growing, businesses are starting to invest and expand rather than merely fight for survival.
In fact it is London that is driving growth according to cnplus.co.uk thanks to public sector recovery and small scale retail growth. This is encouraging news for electrical firms looking for new contracts. Electrical firms that have kept a tight control on their purse strings have reported strong and stable business growth during 2013. Diversification into specialist areas such as electrical maintenance and electronic security have aided continued survival.
New research from Glenigan, the leading provider of construction project leads and industry analysis suggests that the private sector will provide the majority of the upturn and much needed boost to the construction industry. The value of private sector housing projects is set to grow as expected by 9%. Other key projects driving recovery forward are hotels and leisure at a growth of 13%, retail which suffered a 24% dip during 2013 but is expected to rise to 7% during 2014, offices expected to grow by 8% this year as well as an increase in demand within the industrial sector. These sectors are expected to form the backbone of a solid return to growth in 2014.
With business investment that has been held back in previous years now finally being given the go-ahead, office projects are rising significantly in the capital. Other major UK towns and cities have not been left behind, however a current shortage of space means some projects are delayed and will therefore see growth continuing into next year.
This is leading to increasing demand for distribution centre projects. Unfortunately the manufacturing sector sees its demand for premises reduced as it continues to raise output to pre-recession levels.
This was not unforeseen. The reduction is due to continued public sector cutbacks. However current activity does remain at 48% higher than in 2007. Unfortunately this is not expected to continue during 2014 as a result of the continued public sector cuts.
Although the driver for the current growth, Glenigan expects further project starts during 2014 to flatten out. However other UK regions are expected to pick up on this growth drive particularly in private sector housing thanks to increased confidence in the housing market, lower interest rates and easier mortgage availability.
There are signs of sustainable growth not seen before in the construction industry in recent years. There is growing optimism that projects are coming to fruition and not just dying out at the planning stages.
The general feeling within the construction industry is quiet confidence that the worst of the downturn is now over.
The focus for 2014 will be on the private sector driving recovery with grass roots already being formed for continued growth in 2015.