5 predictions for UK construction and the built environment in 2019
Last year was a year of uncertainty and difficult market conditions. At the end of 2018, we were still waiting for the Brexit deal to be agreed and to date many different projections and forecasts have been published, mostly with a pretty pessimistic outlook, outlining what might happen if we leave the EU without a deal in March 2019.
If nothing else, 2019 will prove interesting. The economic outlook continues to be uncertain, and uncertainty is not good in any market, so in the short term, there is likely to be some volatility in the UK’s economic performance, but on the whole it seems the consensus is that construction will continue.. it has to!
In the housing sector, there is the ever widening gap between supply and demand to address, and that demand won’t go away, even if we accept fewer EU migrants into the country. Speculative development in larger cities may see further falls in the short term, but demand for housing remains strong, as long as developers adapt their development output to match demand.
Infrastructure is expected to continue to be one of the strongest sectors for construction over the next couple of years. A large number of large infrastructure projects are already underway, and as well as what’s already planned, infrastructure output could also be boosted by a Brexit situation. If the scenario that plays out requires a hard border with the EU, there will be new requirements for infrastructure.
Material price increases are likely, with the currency a little unstable at present and import/ export costs difficult to predict. This could also lead to even tighter margins on large-scale projects, something which would be a worry for the UK contracting sector, as it is already under immense pressure.
So, with the future market and economic conditions almost impossible to predict – what can we say about 2019?
Well, there are some important trends that should not be overlooked. They’re not new, they have been gathering pace for a while, but it’s possible that 2019 will be the year when these trends have a substantial impact. And what’s more, they have very little to do with politics.
#1 – Changes in buying behaviour will lead to major changes to the distribution structure
It’s inevitable that the changes in buying behaviour we’ve seen over the past few years will lead to further changes in the distribution sector, and it’s possible that there will also be more casualties in 2019. The impact of this is something we’ve seen in the news almost every week in recent months, in a retail context, but it’s not just a consumer issue – buying behaviour has changed among tradesmen and in a B2B context too. Read more
#2 – A focus on integration will stimulate a move towards smart homes
It’s true that sales of smart devices have increased strongly in recent years, if we look at tablet computers, smartphones, smart watches and other smart devices, such as Amazon’s Alexa and Echo, Google Assistant and others. There is also no shortage of smart devices for controlling various aspects in the home, from smart fridges and vacuum cleaners to full systems managing lighting, heating, air-conditioning and audio-visual systems. Still, so far, the concept of the smart home has failed to take off in a big way. Could this be about to change? Read more
#3 – The uptake of offsite & modular construction and prefabricated components will get a boost
If you’re involved in the construction industry in any way, it probably feels like there’s been talk of the use of ‘modern methods of construction’ for ever. It has been happening and it’s been growing, but perhaps not to the extent many were forecasting a decade ago. Recently, there have been a number of interesting stories in the news that could indicate that this is now changing, including the news that the Department for Education plans to set up a £2bn offsite schools framework, the recent debate in the House of Lords, and the announcement that the offsite sector will be key in delivering the Heathrow Airport expansion project. Read more
#4 – Britain will start to build upwards
Given that Britain is a relatively small island with a much higher population density than other European countries, isn’t it strange that the majority of housing developments still have a focus on individual houses with gardens, rather than blocks of flats – and in the offices sector, that we’re building single storey offices on greenbelt land, rather than multi-storey or high-rise blocks on brownfield land? There are a few drivers that could lead to a change in this area, aside from the more obvious ongoing shortage of development land and rapid population growth in major urban areas. Read more
#5 – Electric vehicles will become a common sight on UK roads
The uptake of electric vehicles in the UK has suffered from a ‘chicken and egg’ scenario – until there are enough electric cars on the road, investment in charging infrastructure is considered risky, but equally, people are reluctant to invest in an electric car if there is a risk of not finding anywhere to charge it. Could electric car ownership (which is predicted to reach 1m by 2022 but is currently a long way off) jump in 2019, and lead to further expansion in the charging network while making charging points at homes and office buildings commonplace? Read more
To read the full articles – and find out what data and insight we’re basing these predictions on – just follow the links within each section or below. MRA Research specialises in market research and insight within construction and the UK built environment.
#1 – Changes in buying behaviour will lead to major changes to the distribution structure
#2 – A focus on integration will stimulate a move towards smart homes
#3 – The uptake of offsite & modular construction and prefabricated components will get a boost
#4 – Britain will start to build upwards
#5 – Electric vehicles will become a common sight on UK roads
