There is no doubt that the building industry has been unequivocally affected by the economic woes Britain has faced since the financial crisis. The sector as a whole has contracted nationally by 7% in the past year, and by around 20% over the last 5 years. At the local level too within London, the sector has crumbled with small and medium sized enterprises (of which the construction sector comprises of 18%) being hit the hardest.
Some though argue to the contrary with reference to London in particular. Long term major construction projects, namely Crossrail and the Olympic legacy have dominated proceedings in the capital sustaining 32,000 and 10,000 jobs respectively giving substance to the argument that recent times have not been too bleak for London in the building sector.
No matter what side of the argument you take, there is no denying the importance construction still has in London, and Britain for that matter. In the South East alone, the sector is worth around £12.5 billion and across the UK counts for 10% of GDP, employing 2 million directly.
As we venture into 2014 there is talk that construction is on the rise. According to Deloitte Real Estate’s Winter 2013 London Crane Survey, central London will see the largest amount of office space constructed for 10 years, approximately 6.6 million sq ft. Has the behemoth that is the building sector reawakened?
We say yes, though don’t expect anything meteoric at first. These view are shared by numerous others, including the Construction Products Association, who forecast a 2.7% growth in 2014 and 5% growth over the subsequent 5 years. This sentiment also is shared by by GVA who expect modest growth mid 2014, improving further from 2015 to 2017.