The Construction industry in United Kingdom registered a market size in value add terms of USD 177,622.25 million in nominal terms in 2021
The indicator recorded a historical growth (CAGR) of 2.32% between 2018 and 2021, and is expected to grow by ...
GlobalData projects the indicator to grow ...
UK Construction Market Aanalysis
The UK construction industry expanded in real terms in 2021, but given the severity of the decline in 2020, output in 2021 was above the 2019 level. The recovery in construction output has been driven by a surge in spending on infrastructure and housing. According to the Office for National Statistics (ONS), in the first three quarters of 2021, new infrastructure construction was up which include, repair and maintenance of housing, and new housing construction. However, given the ongoing weakness in key services sectors, output of new private commercial construction was down by YoY, while weakness in investor confidence has also prevented a recovery in new private industrial construction, which contracted YoY in January-September 2021.
Over the long term, the industry’s output will be supported by a strong pipeline of infrastructure construction projects. In September 2021, the UK government published its National Infrastructure and Construction Pipeline, which outlines investment in infrastructure projects over the next 10 years. Projects in the transport sector account for the largest share of the investment plan, followed by projects in the energy and utilities sector. Some of the major projects in the pipeline include the HS2, the Lower Thames Crossing road tunnel projects, and the Hinkley Point C nuclear power plant project.
Commercial Construction: After a sluggish performance in 2021, commercial construction will start to pick up in 2022, supported by investments in offices, logistics and data center projects.
Industrial Construction: The recent rise in construction orders awarded for private industrial buildings, coupled with the government’s focus on attracting new investments to the country.
Residential Construction: The sector’s output will continue to expand, with growth in the short term reflecting the recent rise in the value of orders awarded for housing construction, coupled with the government’s focus on building affordable housing units in the country.
Value add is calculated by adding all outputs and subtracting intermediate inputs, including equipment, material, labor and energy costs. The term covers all forms of construction activities, including new build, renovation, repair and maintenance and demolition. Nominal data, also referred to as current prices data, includes changes in prices as well as changes in actual volume. Therefore, growth rates in nominal terms can overstate the pace growth in construction activity if there is high inflation that is reflected in rising prices for key inputs.
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