NEWS
Brexit uncertainty impacts commercial investment
T
he Construction Products Association’s (CPA) autumn forecasts for construction output growth in 2020 and 2021 have
been downgraded from 1.0% and 1.4 % to 0.5% and 0.9% respectively from its summer forecasts, reflecting the uncertainty around Brexit and major infrastructure delivery.
The CPA’s forecasts point to the Oakervee Review into HS2 as the key factor now delaying main works beyond the forecast period.
The review could change the scope of work on a project that is already warned to be more than £20 billion over budget, with delays of between five and seven years perpetuating the uncertainty linked to infrastructure construction and delivery. Hinkley Point C, another contributor of growth in the infrastructure sector, has also confirmed delays and cost increases for the construction of its nuclear reactors.
Meanwhile, Brexit uncertainty is impacting on confidence in the commercial sector with a reluctance to invest in new offices until the UK’s
relationship with Europe is made clearer and improves the outlook for long-term investment returns.
In the private housing sector, starts are forecast to fall 2.0% this year given slowing house price growth and weaker demand in southern regions of the country, before returning to growth in 2020 as the economy settles and underlying demand for new build house purchases is enabled by Help to Buy.
The public housing sector’s prospects are more positive due to grant funding on the Shared Ownership and Affordable Homes Programme, although there are signs of vulnerability as housing association development is increasingly linked to the slowdown in the general housing market.
Despite delays on major projects, there are pockets of growth in infrastructure. Large
offshore wind farm projects that are underway or starting soon each reach over £1 billion in value. Combined with a fall in the price the government
pays for wind-generated energy to around a third cheaper than energy generated at Hinkley Point C, there’s further reason for optimism within offshore wind and an indication that renewable energy is gaining a competitive market edge. Warehouses are a sub-sector forecast to
increase by 15% in 2019 and 20% in 2020. Owing to the development of automated warehouses by online retailers which use higher-tech operations in logistics, the scale and value of projects have increased.
Growth in the sector is no doubt amplified by moves away from the high street, where retailers have been hit by higher business rates and rising wage costs.
Carrier
5
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64
