It’s not surprising that the UK construction industry, like so many others, has been hit hard by COVID-19. Before the pandemic began, GlobalData projected an acceleration in the construction sector around the world. Following the impact of the past year, the forecast was revised, from 3.1% down to 0.5%. Regardless, some niches of the sector and some projected or in-progress projects are beginning to take off. Below highlights the road to recovery as we dive into some of the upcoming factors that may be reinvigorating the UK construction industry.
Commercial orders rebound
Construction output is bouncing back in the commercial market, with The Construction Index stating that “British builders are now more optimistic about business prospects than at any time since October 2015”.
UK construction saw a return to growth through February (according to PMI data compiled by IHS Markit). The sector regained its title as a fastest-growing major category in the UK’s private sector output.
So, despite all the doom and gloom, there are at least aspects of the sector that are seeing really positive figures, where reinvigorating the UK construction industry is looking more and more possible.
Three key sectors of growth for 2021 onwards:
Several sectors within UK construction saw a boom during the pandemic, and may reap this into the future.
1: Distribution Centres
We all suddenly became reliant on online shopping and at-home deliveries during lockdown, changing the retail sector (and our habits) at a remarkable pace. The UK became the largest online shopping market in Europe, and the third-largest worldwide, through the pandemic. How likely is it that shopping habits will rebound towards the trend for high street consumerism? 42% of consumers won’t return previous ways, according to research by Tamebay.
This rise in online retail means that more distribution centres – dubbed ‘mega-sheds’ – will need to be built. These will need to be well-sited and well-integrated into logistical and transport networks.
Goods are often stockpiled near urban areas by retailers, who value these large distribution centres more and more as e-commerce gets more and more competitive. Delivery must be quick and cost-effective. With the impact of Brexit to consider too, it’s unlikely that UK retailers will be looking to do anything but invest in these distribution centres, prizing their ability to maintain product availability despite any disruption in supply chains, and supply a ‘just in case’ backlog of products. The construction industry is thus likely to see a continuation of this boom in design and construction for distribution centres, and it is likely to be a crucial revenue generator for the future.
2: Modular Construction
Whether for housing or for commercial setups, modular construction is becoming increasingly popular. Constructing standardised building components offsite and then simply assembling them onsite, this modern method shifts much of the ‘industry’ into off-site factories. Modular construction is considered cost-effective, space-saving, and efficient by many as an alternative to traditional building methods.
The outcome of the pandemic has made it look even more desirable, as it’s likely to be easier to socially distance throughout the construction process on modular buildings (as opposed to on a traditional building site). It’s also quick (crucial for construction projects like regenerating NHS facilities and tackling the UK’s housing shortage) and more eco-friendly. In addition, it’s likely to be easier for workers to keep the construction site clean and sterile whilst building.
This is a topic that has been in the news since the Grenfell disaster, and urgent that the government continues to ensure high-rise buildings are made safe. Combustible cladding materials were banned on all new buildings over 18 metres high in December 2018, and the topic remains controversial. With changes (in the Building Safety Bill of July 2020) placing greater onus on those designing and constructing such buildings, it’s likely that construction efforts to amend and ameliorate existing buildings, and to work on new ‘higher-risk’ buildings, will remain a crucial building block of the sector, ensuring every building is safe and fit for purpose.
So, although the sector faces difficulties, there are some positive projects on the horizon, and reinvigorating the UK construction industry in 2021 is not just vital, but feasible too.