The construction industry is struggling, but are things getting better?
It’s no secret that things in the construction industry at this moment in time are not in the best of health. There’s hardship everywhere you look and unfortunately, it’s a very difficult time for many.
At some point, there will be a light at the end of the proverbial tunnel, but the question on the lips of many is when is that light going to start to become brighter?
In this article, we will look at the current state of the construction industry and analyse where potential shoots of positivity could come from in the remainder of the year.
The picture is a somewhat bleak one, with construction companies folding at the highest rate in a decade, according to the Financial Times.
According to the government’s Insolvency Service, 4,280 companies in construction went under between June 2022 and 2023, which was 16.5% more than the previous year.
The picture didn’t improve for the rest of 2023, with it being reported by insolvency practitioner Begbies Traynor in January 2024 that 7,849 firms were at risk of collapse.
That report from Begbies Traynor also highlighted that construction was the number one industry under significant financial distress.
The good news is yes, although it may still be a harsh ride until the end of the year. Currie & Brown have recently published their April 2004 UK construction market outlook and there are positive signs ahead.
They are forecasting that there should be an increase in construction activity, although there is a risk this “could strain the current limited labour and contracting resources.”
As such, they are hoping for a more staggered approach instead of “a synchronised rush where everyone pursues projects simultaneously.”
In addition, they believe that despite the slowdown, there is ample long-term demand and they feel that companies who can position themselves strategically will be best placed to deal with the spike.
The upturn isn’t just predicted by Currie & Brown, either. S&P Global believes that a painful six month period of decline is now over, as March 2024 saw the strongest increase in new orders since May 2023.
This is especially encouraging as it has shown that a period of growth is coming to the construction industry, which is really important.
The Glenigan Index isn’t quite as optimistic in the short-term, but does believe non-residential construction is showing signs of life, which is good.
The Currie & Brown report is certainly a ray of sunshine amidst an otherwise cloudy backdrop and a much-needed one at that.
Naturally, there is still a long way to go, as per the Glenigan Index, but the S&P Global insight was especially positive.
As outlined in this article, we understand that things are very tough for everyone at present – whether you’re a small firm or a nationwide giant. If you have any concerns that we may be able to help with, feel free to get in touch with us. You can do so here.
At some point, there will be a light at the end of the proverbial tunnel, but the question on the lips of many is when is that light going to start to become brighter?
In this article, we will look at the current state of the construction industry and analyse where potential shoots of positivity could come from in the remainder of the year.
What’s actually happening at present?
The picture is a somewhat bleak one, with construction companies folding at the highest rate in a decade, according to the Financial Times.
According to the government’s Insolvency Service, 4,280 companies in construction went under between June 2022 and 2023, which was 16.5% more than the previous year.
The picture didn’t improve for the rest of 2023, with it being reported by insolvency practitioner Begbies Traynor in January 2024 that 7,849 firms were at risk of collapse.
That report from Begbies Traynor also highlighted that construction was the number one industry under significant financial distress.
Is there any positivity on the horizon?
The good news is yes, although it may still be a harsh ride until the end of the year. Currie & Brown have recently published their April 2004 UK construction market outlook and there are positive signs ahead.
They are forecasting that there should be an increase in construction activity, although there is a risk this “could strain the current limited labour and contracting resources.”
As such, they are hoping for a more staggered approach instead of “a synchronised rush where everyone pursues projects simultaneously.”
In addition, they believe that despite the slowdown, there is ample long-term demand and they feel that companies who can position themselves strategically will be best placed to deal with the spike.
The upturn isn’t just predicted by Currie & Brown, either. S&P Global believes that a painful six month period of decline is now over, as March 2024 saw the strongest increase in new orders since May 2023.
This is especially encouraging as it has shown that a period of growth is coming to the construction industry, which is really important.
The Glenigan Index isn’t quite as optimistic in the short-term, but does believe non-residential construction is showing signs of life, which is good.
Reasons to be hopeful
The Currie & Brown report is certainly a ray of sunshine amidst an otherwise cloudy backdrop and a much-needed one at that.
Naturally, there is still a long way to go, as per the Glenigan Index, but the S&P Global insight was especially positive.
As outlined in this article, we understand that things are very tough for everyone at present – whether you’re a small firm or a nationwide giant. If you have any concerns that we may be able to help with, feel free to get in touch with us. You can do so here.
Related posts
-
While the country was enjoying a bank holiday for Good Friday, the government published technical guidance on the second staircase rule at long last. This had been months in the making and now ho...
-
The famous saying “slow and steady wins the race” certainly is true in some aspects and when it comes to a project, you can’t rush quality. However, it doesn’t always apply. This is especially th...