According to the CPA’s recently published Winter forecast, construction output will increase by 5.3% in 2015. This spreads beyond the private housing sector that did so well last year to include 8.0% growth in commercial offices and 7.9% growth in new infrastructure. These positive forecasts follow on from what would seem to have been a slowing at the end of 2014. There is also an expectation of slowing growth rates in 2016 and 2017, thanks to the general election. But further good news is that industry output is expected to surpass the 2007 pre-recession peak by the end of next year.
Barbour ABI’s January data shows 32% of 2014 construction value was Residential, followed by Infrastructure at 20% then Commercial & Retail at 18%. Spend on Medical & Health (4%) was smaller than Industrial (6%) with the Education (12%) and Hotel & Leisure (8%) sectors sitting in the middle.
Some encouraging signs, but what does it mean for your business? These are broad figures, and while encouraging for companies, do not provide specifics.For example, in recent years most of the commercial office construction activity has been in London but now this is expected to slow, with growth in the major cities outside the capital. This is vital information for a company that has had its main focus on London in recent years.
To avoid being caught out, companies need to overlay the broad forecast data with additional information. This is the detail in the CPA forecast but also the information that Barbour ABI or Glenigan can provide. Importantly not the generally published data about contracts awarded, that’s history and many product choices will have already been made. Data on planning approvals is much more important – these are tomorrow’s opportunities. Combine all of this information and some really useful data will start to come out, which can point sales effort in the right direction and address issues such as: Clients to talk to; Which specifier practices should be targeted; Are there the right specialist contractor partnerships in place?
It all starts with a good understanding of the market and the right forecasting tools.
Competitive Advantage has developed a tailored construction forecasting model, based on reliable data published by the CPA but personalised to reflect your business profile. Click here to view a report sample.
As part of your planning process you need to conduct regular construction market forecasts.
Forecasting can improve your business planning by indicating construction trends, showing the potential value of each construction sector to your business and changes in your market share.
Competitive Advantage can provide a construction market forecast tailored to the opportunities in your sectors.
This exercise is relatively low-cost and can help you anticipate any potential threats and indeed be well placed for new business opportunities.
Contact us for further information.
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