Market Trends of UK Construction Industry
Increase in GVA of Construction Industry Driving the Market
The United Kingdom has a solid competitive edge in the construction market. The United Kingdom has world-class expertise in architecture, design, and engineering, and British companies lead the way in sustainability solutions for buildings.
The changes in the global economy create new opportunities for Britain. The government supports the growth of British companies and their aspirations, trust, and drive to compete on a global scale to promote recovery. This agenda includes reforming the planning system, ensuring that vital infrastructure projects are financed, and supporting the housing market through critical initiatives like the Funding for Lending Scheme and the Help-to-Buy Equity Loan Scheme.
The gross value added (GVA) by the construction sector in the United Kingdom in the first quarter of 2023 was GBP 37.63 billion (USD 47.55 billion), according to its Office for National Statistics. The GVA of this sector dropped to GBP 20 billion (USD 25.6 billion) in Q2 of 2020 due to the COVID-19 pandemic, marking the sector's lowest point in a decade. Out of all the industries in the UK construction sector, private housing was the one that made the most money.
Private Housing Holds the Largest Share in the UK Construction Market
Private housing was the segment that held the most significant share of the UK construction market. Nevertheless, housing and non-housing repair and maintenance together amounted to almost 39% of the construction output in 2022, according to data from the UK Office for National Statistics. The output volume of infrastructure grew during the past years, surpassing the construction of commercial buildings.
There has been a gradual increase in the number of households occupied by private renters in England. According to industry experts, the share of households occupied by private renters in 2023 was estimated to be 18.8%, with around 4.6 million households being privately rented. There has also been a marked increase in the average price of homes in the United Kingdom.
In the United Kingdom, private rental prices increased in the 12 months to January 2023 by 4.4%, up from 4.2% in the 12 months to December 2022, according to the Office of National Statistics. From 12 months to January 2023, the annual private rental price increased by 3.9% in Wales, 4.3% in England, and 4.5% in Scotland. In England, the East Midlands had the highest annual percentage change over 12 months to January 2023 in private rental prices of 5.0%, while the West Midlands recorded the lowest change at 3.9%. Also, in the 12 months until January 2023, London's yearly percentage change in private renting prices was 4.3%.
