The UK construction industry is very diverse and presents massive opportunities for businesses to tap into its potential.
The UK construction industry is one of the most important economic drivers with more than 6% contribution in GDP. The construction sector was worth £113 billion in 2017. The average growth rate of the industry in the last three years has been 4.7% and if we look back at 5 years ago, this growth rate was slightly higher at 4.9%. Although the growth was negative in 2018 (-3.6%), it is expected to have an excellent future outlook in the long run with estimated gross value added of 1%.
The UK construction industry is very diverse and presents massive opportunities for businesses to tap into its potential. The industry is divided into three subsectors, commerical & social (45%), residential (40%) and infrastructure (15%).
Subsectors with the commercial and social sector having the largest share of 45% followed by the residential sector. According to the Construction Output in Great Britain: April 2019 Report, the new constructions experienced a growth by increased 0.1% in total, compares to the previous three months with the growth in infrastructure at 3.6%; public new housing at 4.7%. Compare to the previous three months, new orders grew 9.6% which is believed that the sector is have a bright future in UK’s economy.
The growth in infrastructure is largely benefited from projects like Crossrail, Thameslink, HS2 and Hinkley Point. Another factor which would contribute to the growth of infrastructure is the government’s plans of regenerating major cities including Birmingham and Manchester.
The construction industry employs 2.4 million people in the third quarter of 2018 which 6.8% of total UK employment. Unlike other industries, the construction industry demonstrates a high proportion of self-employment at 13%, compares to the average for the whole economy in UK. In 2017, the total number of businesses operating in the UK construction industry was estimated to be more than 350,000 in 2019 with a year on year growth at 6.2%.
The services sector in the UK Construction industry is as diverse as the construction industry and it can be seen differently from the physical material and products which comprised of the following services:
The services sector has a direct correlation with the construction activity. The new construction orders in 2017 grew by 7.4% compared to 2016 with a major growth seen in new housing to the extent of 5.8% which valuing at £20,998 million. The reason for the lesser overall growth of the industry is the decline in public sector housing which was recorded at 13.6%.
Although the construction industry seems to expose more threats and risks than other businesses, it is undeniably the market value of it is still soaring. In November 2018, the government announced several investment projects to transport systems, social infrastructure, hospitals and schools through the National Infrastructure and Construction Pipeline. Apparently government shows her supports to this industry and would like encourage more businesses in construction industry. If you are struggling with how to start the business and how to go through steps, you are welcome to consult with our professionals at +44(0) 203 637 6137, we would be delighted to discuss with your ideas.