Construction Industry Forecast 2023-2024

Posted by Building and Land Guarantees Ltd on 22nd November 2022 -

Glenigan have produced a Construction Industry Forecast, which focuses on the next two years (2023-2024). The construction industry will struggle in the face of extremely challenging economic conditions, with predicted growth in decline during 2022 (-2%) and 2023 (-2%).

However, a brighter outlook, although a little way off in the distance, are starting to emerge on the horizon, with a 6% increase predicted in 2024.

The slower road to recovery

Glenigan predicts the next 24 months to be a challenging period for the construction industry, with ongoing material, labour, and energy supply chain disruption continuing to hold back activity for the foreseeable future.

These external events have resulted in rocketing inflation, rising interest rates, and stalled economic growth, affecting the pipeline of future work. This has been further compounded by the promise of higher tax, utility bills, and rising mortgage costs which has constrained consumer-related construction, including private housing, retail, hotel and leisure.

Resurgence in private residential construction

Housing market activity cooled-off in 2022, and is predicted to slow further in 2023 as developers respond to weakening market conditions.

Project-starts are forecast to drop this year, with a further decline next, as lower household incomes, higher mortgage rates and lack of affordable homes

Nevertheless, the growing prospect of a stabilising economy in 2023, gradually improving consumer confidence over the next two years supports a forecast of a respectable 15% rise in residential project-starts during 2024.