Table of Contents
Executive Summary
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- The market
- Reduced level of growth
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- Figure 1: The construction market, 2014-18
- New housing still buoyant
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- Figure 2: Segmentation of housing new construction output, 2014-18
- Brexit starting to impact new commercial construction
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- Figure 3: New commercial construction output, 2014-18
- Less obvious Brexit impact on industrial new construction
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- Figure 4: New industrial construction output, 2014-18
- Government policy restricting public non-residential activity
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- Figure 5: Public non-residential construction output, 2014-18
- R&M growth slowing
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- Figure 6: R&M construction output, 2014-18
- Difficult short-term prospects
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- Figure 7: Forecast construction market, 2019-23
- Companies and brands
- A very unusual industry structure
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- Figure 8: Employment profile of the construction industry, 2017 (000 employees)
- Sole traders and SMEs active across trades and contracting sectors
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- Figure 9: Composition of main construction trades by size of company (number of companies and number of employees)
- What we think
Issues and Insights
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- Universities – the hidden gem
- The facts
- The implications
- Who will solve the housing crisis?
- The facts
- The implications
- The high street needs to change
- The facts
- The implications
The Market – What You Need to Know
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- Cyclical, but different cycles
- The Brexit impact is not clear
- Sectors showing differing trends
Market Size
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- Slowing growth
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- Figure 9: The construction market, 2014-18
- Even R&M output growth slowed
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- Figure 10: Comparison of new construction and R&M output, 2014-18
Market Segmentation
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- R&M leads the market
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- Figure 11: Segmentation of the construction market, 2018 (% of total)
- Major differences in growth between sectors
Segmentation: Housing
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- Strong private sector growth
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- Figure 12: Segmentation of housing new construction output, 2014-18
- Figure 13: UK house building completions, 1970-2018
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- Figure 14: Comparison of social and private housing completions, 1970-2018
- Activity gained momentum throughout year
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- Figure 15: Quarterly house new construction output, 2018
- Almost a third of market satisfied by micro companies
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- Figure 16: Housing output segmentation by size of company, 2018
- Housing – a broken market for decades
- Government supply and demand initiatives
Segmentation: Commercial
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- Brexit uncertainty starts to impact
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- Figure 17: Long-term trend in private commercial construction, 1970-2018
- Reduced output in most sectors in 2018
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- Figure 18: Segmentation of private commercial construction output, 2014-18 (£ million)
- Flat market after first quarter
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- Figure 19: Quarterly private commercial new construction output, 2018
- SMEs command 61% of the market
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- Figure 20: Private commercial output segmentation by size of company, 2018
Segmentation: Industrial
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- Brexit effect not yet evident
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- Figure 21: Long-term trend in private industrial construction, 1970-2018
- Factory and warehouse demand growth
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- Figure 22: Segmentation of private industrial construction output, 2014-18 (£ million)
- Deteriorating output in 2018
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- Figure 23: Quarterly private industrial new construction output, 2018
- Micro companies gain 24% of output
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- Figure 24: Private industrial output segmentation by size of company, 2018
Segmentation: Public Non-residential
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- Government policy restricting activity
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- Figure 25: Long-term trend in public non-residential construction, 1970-2018
- Entertainment – the star of the show in 2018
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- Figure 26: Segmentation of public non-residential construction output, 2014-18 (£ million)
- Output fell off in Q4
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- Figure 27: Quarterly public non-residential new construction output, 2018
- A major market for enterprises
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- Figure 28: Public non-residential output segmentation by size of company, 2018
Segmentation: R&M
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- R&M benefits from house price inflation and economic uncertainty
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- Figure 29: R&M construction output, 2014-18
- Various influences
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- Figure 30: Segmentation of R&M output, 2018 (£ million)
- Private housing R&M
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- Figure 31: Private housing R&M output, 2014-18
- Figure 32: Private housing R&M output segmentation by size of company, 2018
- Public housing R&M
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- Figure 33: Public housing R&M output, 2014-18
- Figure 34: Public housing R&M output segmentation by size of company, 2018
- Non-residential private R&M
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- Figure 35: Private non-residential R&M output, 2014-18
- Figure 36: Private non-residential R&M output segmentation by size of company, 2018
- Non-residential public R&M
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- Figure 37: Public non-residential R&M output, 2014-18
- Figure 38: Public non-residential R&M output segmentation by size of company, 2018
Market Forecast
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- Short-term disruption
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- Figure 39: Forecast construction market, 2019-23
- Continued divergence of sector performance
- Strong new housing prospects
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- Figure 40: Forecast new housing market, 2019-23
- Short-term difficulties in private non-residential
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- Figure 41: Forecast private non-residential new construction, 2019-23
- Public non-residential construction continues to reflect restrictions
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- Figure 42: Forecast public sector non-residential new construction, 2019-23
- Varied influences on R&M activity
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- Figure 43: Forecast R&M activity, by sector, 2019-23
The Impact of the Economy
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- GDP
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- Figure 44: GDP overall quarterly development, Q1 2015-Q4 2018
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- Figure 45: GDP quarterly development, by sector, 2004-18
- Figure 46: Forecast GDP development, 2019-2023
Market Trends
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- Offsite construction/prefabrication
- Adaptive reuse
- Greener and smarter buildings
- BIM
Market Drivers
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- The productivity issue
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- Figure 47: Construction productivity compared with whole economy, 1997 Q1-2018 Q3 (index, 1997 Q1 = 100)
- The housing issue
- Government policy
- Brexit
Companies and Brands – What You Need to Know
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- The disconnect between number of companies and turnover
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- Figure 48: The role of companies in residential and non-residential construction (% of companies and output)
- Construction has a very unusual employment profile
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- Figure 49: Employment profile of the construction industry, 2017 (000 employees)
Industry Structure
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- Growing number of companies
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- Figure 50: Number of companies active in construction, 2013-17
- A mix of general contractors and trades
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- Figure 51: Development of the main contractors, 2013-17
- Vast numbers of sole traders and SMEs
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- Figure 52: Composition of main construction trades by size of company (number of companies and number of employees)
- Figure 53: Employment profile of the construction industry, 2017 (000 employees)
Industry Strategies
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- So many issues to tackle
Company Profiles
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- Balfour Beatty
- Activity
- Performance
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- Figure 54: Segmentation of Balfour Beatty Revenues, 2018 (£ million)
- Strategy
- Barratt Developments
- Activity
- Performance
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- Figure 55: Financial performance of Barratt Developments, 2014-18
- Figure 56: Geographic breakdown of house completions by Barratt Developments, 2018
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- Figure 57: Profile of houses completed by Barratt Developments, by type, 2018
- Strategy
- Interserve Group
- Activity
- Performance
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- Figure 58: Financial performance of Interserve (£ million)
- Strategy
- Kier Group
- Activity
- Performance
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- Figure 59: Financial performance of Kier Group, 2014-18 (£ million)
- Strategy
- Persimmon
- Activity
- Performance
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- Figure 60: Financial performance of persimmon, 2014-18 (£ million)
- Strategy
- Taylor Wimpey
- Activity
- Performance
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- Figure 61: Financial performance of taylor wimpey, 2014-18 (£ million)
- Figure 62: Regional breakdown of Taylor Wimpey activity, 2018 (Number)
- Strategy
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Methodology
Further Sources and Contacts
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- Trade associations
- Trade magazines
- Trade events
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