2024 Construction Review
Barbour ABI
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In 2024 the Construction industry saw some highs but unfortunately what felt like many more lows. We saw over 35K detailed planning applications (excluding individual builds), worth ￡126Bn; this is in decline vs 2023 from a value perspective of -6% and a volume perspective of -3%, which tells us that there were less "big ticket projects" submitted in 2024. The journey of all 2024 applications can be seen in the visualisation below. It highlights the slow nature of construction in the UK, with many projects sitting awaiting approval or shovels in ground for many months.
Planning Applications
Of the applications, residential (￡46.6Bn) and infrastructure (￡42.7Bn) dwarfed all other categories combined (￡36.3Bn) highlighting the industry's reliance on these two super sectors. It is reassuring therefore that the Labour Government has outlined key objectives in both of these areas, however many in the industry remain sceptical about the possibility of realising some of these plans. Residential remains a key talking point in the press and industry. There were applications valuing ￡9.2Bn in 2024; however ￡1.7Bn of these were refused and a further ￡1.1Bn withdrawn. Residential applications were twice as likely to be rejected or withdrawn than the average industry project, highlighting the ongoing difficulty housebuilders face. Given the government’s massive targets for housebuilding, the year-on-year decline of ￡4.5bn (or -9%) is especially concerning. Although could it be that 2024 was a year of housebuilders waiting to see what might come? To confirm the slow industry that the graphic shows: as of the 1st Jan 2025, 60% of applications made in 2024 remain at planning stage - a concern for 2025 and beyond.
Planning Approvals
It is not all doom and gloom, despite planning approvals dipping again by 8% below ￡100bn, some sectors performed well. Education had a positive 2024 with a 16% uplift on 2023, it’s highest year since 2019.? Also, the North West achieved their highest value for approvals in over 5 years.
Contract Awards
Continued skilled labour shortages and insolvencies, regulatory delays resulting from the Building Safety Act and a slower-than-expected interest rate decline, have all challenged the construction industry in 2024. Despite these challenges, contract awards have increased 15% from a poor 2023 and almost reached the record highs of 2022.
The infrastructure sector has been the major driver for awards in 2024, increasing from 2023 by a whopping 56%. This was bolstered by "mega" wind projects at Hornsea and Inchcape. However, the major tunnelling works at the Lower Thames don't yet have a development consent order and won't see a decision until May 2025.
So, what is to come in 2025? Follow our newsletter to ensure you are up to date with the latest UK construction news.
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Our Construction Industry Monthly Snapshot looks a bit different this month.?Rather than reviewing just December, we've reviewed the entire year and analysed the industry's performance.?
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1 个月FYI Barbara Kuepper
National Account Manager | Housebuilders & Developers | Residential & Commercial Projects | Mineral Surfaces & Porcelain | Driving Sustainability ??
1 个月Thank you for the comprehensive review of 2024 in construction. The insights around residential and infrastructure highlight the challenges and opportunities ahead. The decline in residential planning applications and approvals, despite significant government targets, underscores the pressing need for collaboration between policymakers, developers, and local councils to address bottlenecks. It's a concern that 60% of 2024 applications remain at the planning stage—unlocking these projects could bring much-needed momentum to the sector. The infrastructure growth is promising, especially the rise in renewable projects like Hornsea and Inchcape, but it's clear that streamlined regulatory processes are critical to maintaining this upward trajectory. 2025 looks like a year of potential, provided the industry continues to adapt and innovate amidst challenges. I'm particularly interested in how sustainability and decarbonization targets will shape project priorities this year. Looking forward to the Forecast Bulletin for further insights!
Director of Machmade Limited
1 个月The highs and lows of the industry