Construction in the UK: The Green Shoots of 2022

The advanced digitalisation of the UK economy has barely paused for breath during the pandemic. Ecommerce, remote working, software as a service, cryptocurrency, streaming - if anything, lockdowns have been an unexpected gift to many industries. In contrast, we might have expected to see a marked downturn in the fortunes of one of the most physical sectors: construction. It's true that work on construction projects did grind to a halt in the spring of 2020 but as the economy began to open up later in the year and the industry found ingenious ways to adapt, activity resumed rapidly. Public sector infrastructure schemes may have captured the headlines but private investment proved to be the main driver of growth, with innovative designs demanding ever more specialist skills, as we saw in several significant areas.

Warehousing and Distribution

Ironically, the growth of ecommerce has increased demand for storage and distribution centres. For example, GMI Construction recently completed a state-of-the-art 437,000 sq ft fulfilment centre for ASOS, while Winvic, one of the UK's biggest warehouse development contractors, has recently signed major deals to deliver developments in Kettering and Northampton. Winvic predicts a huge rise in turnover to £1 billion for the year ending 31st January 2022. Meanwhile McLaren has been awarded the contract for the Didcot Data Centre project and TSL is to build three warehouses for the logistics investment firm GLP.

Energy

Construction is also at the forefront of the renewable and green energy industries. Another major contractor, Graham, has joined the Teesworks Freeport Project, tasked with the transformation of the old Redcar Steelworks into a servicing facility for the offshore windfarm at Dogger Bank. Activity in this sector will receive a significant boost from the government's new renewable energy support scheme, which is putting over £200 million forward in its fourth round of the Contracts for Difference scheme, bidding in which opened at the end of 2021.

Stadia

There have been several high-profile sports stadium projects in the years since London 2012, with next-gen high-tech builds such as the new ground for Tottenham Hotspur and the trend is set to continue with two developments on Merseyside. Everton's £500 million replacement for Goodison Park will be built at the heart of the Liverpool Waters project, with a £15 million grant and £30 million loan from the Liverpool Combined Authority. The hope is to create 15,000 jobs and inject £1 billion into the local economy. Due to open for the same season in 2023/24 is Liverpool's major expansion of Anfield. And it isn't just the giants of the premier league who are investing: new grounds are planned or in development for Fulham, Crystal Palace and Luton.

Retail

Another irony is that despite the relentless growth of ecommerce, plans for retail development remain healthy. Instead of traditional single-function sites, however, most new retail builds are conceived for mixed use, to emphasise and extend the unique value of the in-person shopping experience. An example of this is the mixed-use community project at Candleriggs in Glasgow, which by the end of 2023 will deliver a complex covering nearly 79,000 square metres, incorporating retail, hospitality and residential. Elsewhere, the redevelopment of Cardiff proceeds apace, with plans to turn its Queen's Arcade site into a brand new shopping street. As we emerge slowly from the depths of the pandemic, we will see even more investment in truly modern retail initiatives.

Not only does the buoyancy of the construction industry presage good news for local economies and the future of retail in general, it also means a boost in the demand for skilled personnel, attracting back many people whose contribution to construction has been inevitably hampered over the last two years. One of the challenges facing contractors of all sizes is filling their vacancies, for which there is no better alternative than a talent partner with a proven track record in supplying the talent the construction industry so desperately needs.