UK construction contributes £90 billion to the UK economy, 6.7% of the total. It provides employment for 2.93 million, representing 10% of total UK employment. Understanding the scale of the construction sector and its many different elements can be a challenge for the construction products marketer. In this blog I have gathered some information to help explain the UK construction sector, these take a look at the size of the UK construction industry, its different sectors and its impact on the UK economy.UK #Construction equates to 6.7% of UK GDP and employs 2.93 million people Click To Tweet
Broadly speaking there are two main market sectors in construction: public sector, projects that are driven by central government and local government, and private sector, projects that are independently financed as well as public projects with private finance. KPMG report that the value of the UK government construction pipeline has grown by £62.2bn since 2015.Value of UK government’s #construction pipeline has grown by £62.6bn since August 2015 @KPMG Click To Tweet
Within the public and private sectors there are many different types of project which fall into Health, Residential, Education, Retail, Leisure, Infrastructure etc. Latest figures from Barbour ABI show that the residential and infrastructure sectors combined represent 2/3rds of UK construction contracts.
This is similar to the latest ONS Construction output figures. In March 2016 they show 38% of all new work is attributed to all new housing, and 19% from infrastructure, with the remaining being attributed to other new work.65% of UK #Construction Contracts fall into residential or infrastructure @BarbourABI Click To Tweet
Residential Construction Sector
In 2004 The Barker Review recommended the building of 250,000 homes per annum to meet increasing demand. According to HBF figures housebuilding for the past decade has persistently fallen below the recommended figure. And recently the NHBC revealed that the number of new homes completed in the financial year 2015-2016 was 137,396 – some 10% higher than the 125,218 achieved in the previous year! The statistics are published by the NHBC and relate to new homes registered with them for a ten year warranty and account for approximately 80% of all new homes built in the UK. Some argue that the government pledge to build a million homes by 2020 will still fail to meet the shortfall.March 2016 saw 38% of all new work being attributed to housing @ONS #construction Click To Tweet Figures from @NHBC show new home completions 10% higher in 2015-2016 than previous year Click To Tweet
SOURCE: ONS Construction Output
The ONS report an increase of 4.8% in total new housing output compared with Quarter 4 (Oct to Dec) 2015. Both public and private new housing reported increases of 4.2% and 4.9% respectively.Total new housing Q1 2016 equates to just over £7.5million @ONS Click To Tweet
Education Construction Sector
Competitive Advantage recently completed a market report on the UK Education Construction Sector. The education construction sector is now starting to recover, with forecasted growth through to 2019. The government has pledged a significant investment of £12.7 billion for education construction projects to 2020 and beyond. In addition the university sector spends almost £32 billion each year on capital projects with a number of major projects announced for the next 10 years..@CPA_Tweets estimate education sector to be worth £9.3 billion in 2015 with an increase of 4.7% in 2016 #construction Click To Tweet
Learn more by purchasing our research: Construction Market Report: UK Education Sector
Healthcare Construction Sector
In the government autumn 2015 spending review £500 million was pledged for investment in building new hospitals, with new hospitals in Brighton, West Birmingham and Cambridge over the next 5 years promised. Recently KPMG have reported the value of construction pipeline for the Health sector to be £4.3 billion.
Of the 597 health projects there are 10 large NHS–led capital programmes, totaling £2.2 billion and 587 smaller works and capital programmes procured via the Procure 21 Framework. The ProCure21+ National Framework is a framework agreement with six Principal Supply Chain Partners. And Procure21 claim that 40% of the £110bn annual turnover of the Construction Industry comes from the public sector, and at present the NHS is the largest capital construction client in the country. Recently the next generation, ProCure22, was announced and is planned to start in October 2016.
Learn more by purchasing our research: Construction Market Report: UK Healthcare Sector
Infrastructure Construction Sector
Infrastructure dominates with 33% of the construction contract total (source Barbour ABI). In fact the UK has the largest infrastructure project pipeline in Europe.
The National Infrastructure Pipeline 2016 provides further detail on the recent budget announcements regarding HS2, HS3 and Crossrail, together with details of investment in over 600 infrastructure projects and programmes in all sectors across the UK. The Pipeline gives an overview of what, when and where infrastructure will be built. £300 billion is to be invested in the coming five years. The accompanying National Infrastructure Delivery Plan 2016 to 2021, sets out the strategy for improved infrastructure delivery, and is the first to detail how infrastructure will support large-scale housing, regeneration and key social infrastructure..@KPMG report that transport has the highest designated construction value (51% of total pipeline value). Click To Tweet £300 billion to be invested in UK infrastructure over 5 years, the largest infrastructure pipeline in Europe Click To Tweet