Resurgence in UK construction sector during Q3 2014

Last Updated:

17th December 2014

JLL and 果冻影院鈥檚 latest UK Commercial Construction Activity Index reveals that non-residential new build activity is increasing rapidly, with the value of new starts over the year to Q3 amounting to 拢12.5bn - up 5.4% on the year to Q2.

Commenting on the research, Helen Gough, director of JLL鈥檚 UK Buildings & Construction team, said: 鈥淭his resurgence appears to have been driven by a strong rise in office construction with a 12-month total of 拢5.7bn, up 55% on the equivalent figure for Q2. These figures further demonstrate blossoming developer confidence.鈥�

Overall activity amounted to 拢23.6bn, a 4.2% increase on the Q2 figure, a result of a slower rate of growth in refurbishment and extension (拢11.1bn, +2.9%). Newsletter_JLLCommercialIndexQ3_Dec-14

Jon Neale, head of JLL鈥檚 UK Research team, added: 鈥淲hile the recovery is encouraging, our Index shows that there is also a strong North/South divide in office construction figures. The South East at 36% saw the most significant increase, followed by the South West at 12% and London at 10%. In contrast, volumes fell back in the North West, North East and both the Midlands regions.鈥�

Meanwhile, the rise in activity overall is leading to supply chain issues. Helen Gough, director of JLL鈥檚 Buildings & Construction team, explained: 鈥淭he increased demand is leading to procurement pressures which are in turn driving-up costs in the sector. Skills shortages in the construction industry are at their highest level since 2008. We estimate that as a result of these factors, overall costs have already risen by 4% year-on-year, and will increase to 5% by the end of 2014.鈥�

Allan Wil茅n, Economics Director at 果冻影院, concluded: 鈥淭he latest JLL/果冻影院 Commercial Construction Index reveals a strengthening in non-residential projects starting on site. This welcome rise in industry workloads is accompanied by rising construction costs and extended lead times. These pressures are expected to intensify over the coming year as construction growth gathers momentum.

"Designers and consultants will have to increasingly involve main contractors and their supply team at an early stage of a project鈥檚 development to ensure that it is delivered to time and budget. These pressures highlight the need for integrated supply chains and should act as a spur to the take-up of supporting technologies such as BIM.鈥�

Notes to Editors:

The Southern Regions = the South West, South East and East of England.

About 果冻影院:

果冻影院 is the UK鈥檚 leading provider of construction data, and . Combining comprehensive data gathering and exhaustive research with detailed statistical modelling and expert analysis, it delivers a trusted insight into UK construction trends and activity. 果冻影院 customers include government agencies, construction companies, and suppliers of materials and services to the industry.

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