The Outlook for the UK Construction Industry in 2023

16th February 2023

The Outlook for the UK Construction Industry in 2023

The UK construction industry is a major contributor to the UK economy and is expected to face some difficult times in 2023. On the back of the building boom after the pandemic, when the markets opened back up, the sector has faced some very challenging market conditions.

Firstly, there was a huge reduction in the number of skilled workers available as a result of the dual catastrophes of the Brexit effect and the pandemic which on its own challenges the skills market as employees and contractors looked to change jobs and make different lifestyle choices.

Secondly, the raw cost of materials rocketed and coupled with the difficulties of getting materials into the UK the cost of building projects doubled or tripled overnight.

Currently we are in the biggest cost of living crisis for over 30 years which reduces the amount of building projects going on with many homeowners “putting off” projects until they can see a clearer financial future. The cost of energy is also having an impact as construction sites consume a lot of energy.

In the larger commercial construction areas, the pipeline of work ready to start is slowing down as companies nervously try to deal with the rising costs and lack of skilled workers.

In the private residential market, the housing market is slowing down considerably as higher interest rates and high inflation are impacting homeowners pockets.

The outlook for materials cost is bleak with prices of materials such as bricks, plasterboard and concrete production not climbing upwards but not coming down in price either and this in conjunction with high energy production costs – the market is slowing down while companies large and small alike have to adjust to the changing market conditions.

The UK government is taking steps to ensure that the construction industry remains competitive by investing in skills development and training programs. This will help ensure that there are enough skilled workers available to meet the growing demand for construction services. However, recruitment of candidates for these programs is slow as the UK has relatively low unemployment and there has been a shift in working practices since the pandemic with many individuals now choosing careers that they can work in remotely.

Latest data from the Office of National Statistics has shown that monthly construction output is at 0% growth and total construction new orders decreased in December 2022 by 1.8%.

Last year Construction News reported that the skills shortage in the construction industry is alarming with as many as 75% of building contractors stating that they struggle to recruit skilled workers.

Now is a great time to make your business as efficient as possible to work smarter in these difficult times in the construction industry. Automating your estimating, project costing, applications and invoicing can add value to your business and help you keep your costs competitive when quoting for new projects. Our electrical estimating software is easy to use, modular and time saving. The complete Suite of Modules can cover from Initial Enquiry, through to Final Account.

Ask for a FREE demo today.