“Reasons to Be Cheerful”: A Positive Outlook for the UK Construction Sector
The UK construction sector is experiencing a resurgence, driven by a healthier economy and increased workload. As outlined in Arcadis’ latest Market View report, “Reasons to be Cheerful,” there’s a positive outlook for the industry, despite some challenges.
A Brighter Economic Landscape
The report predicts a period of low inflation in the building market, with prices expected to rise gradually over the next few years. This stability is a welcome change after a period of uncertainty. Additionally, increased activity in London and the South East suggests a strong regional market.
Infrastructure Investment and Challenges
While infrastructure inflation varies across sectors, the overall trend is positive. The government’s commitment to infrastructure projects is driving demand, though challenges remain, particularly in areas like water and electricity networks.
Labour Shortages and Rising Costs
One significant challenge facing the industry is the shortage of skilled labour. As workloads increase and competence requirements tighten, contractors are finding it difficult to fill vacancies, leading to rising labour costs. To mitigate this issue, the report highlights the importance of competence schemes and the need for contractors and clients to monitor their implementation.
Navigating a Changing Market
The report also emphasizes the need for a more commercial approach to tendering. Contractors must carefully consider risk allocation and contractual terms to navigate the increasingly competitive market.
Overall Optimism
Despite the challenges, the overall outlook for the UK construction sector is positive. The improved economic conditions, coupled with increased investment in infrastructure, offer reasons to be optimistic about the industry’s future. By addressing the issues of labour shortages and navigating the changing market, contractors can position themselves for success in the coming years.
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