UK Construction Intelligence Report Q1 2023

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With a slowing economy we take stock after a couple of turbulent years and forecast what lies ahead for 2023.

2022 saw rampant inflation drive construction output to record levels. This was true regarding the value of work, but once the effects of inflation were stripped away the actual volume of work remained around 2019 levels. 

With the UK now hovering on the brink of a recession, how will this and the predicted fall in construction output affect the sector? As we start 2023 the key points of our report are listed below. 

Inflation 

We are now anticipating tender price inflation to be 3% in 2023, previously we reported 3.75% in our last forecast. This should then be 2.5% in 2024 as the market continues to stabilise. 

Infrastructure 

The infrastructure sector continues to remain resilient, and our new infrastructure tender price forecast is for 4.25%. 

Construction 

  • Inflationary pressures in the construction sector are beginning to reduce amid wider economic downturn and better material availability. 
  • Construction output by the value of work is 20%, which is above pre-pandemic, but strip away the inflationary effects the volume of output has risen by 3%. 
  • Construction output is forecast to fall in 2023, before recovering slightly in 2024. 
  • Construction insolvencies remain at the same levels as 2008 and 2010. 

Republic of Ireland 

While the UK is experiencing a downturn in the construction sector, the Republic of Ireland is experiencing greater inflationary effects and we forecast tender prices to increase by 5%. 

Click to view the full report: 

Construction Intelligence Report Q1 2023 

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