Construction Review 2024 from Barbour ABI
Our Construction Industry Monthly Snapshot looks a little bit different this month – rather than reviewing just December, our experts have reviewed the entirety of 2024 and analysed the construction industry’s performance.
The report covers the three key areas of the construction project planning stages:
- Contract awards
- Planning approvals
- Planning applications
2024 Contract Awards up 15% from 2023
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.
All sectors were up on 2023 except industrial which dipped by 12%. Contributing to this is a 40% drop in warehouse projects, despite a boost in factories towards the end of the year.
Infrastructure was the stand-out sector for 2024 contract awards. It increased the most from 2023 by a whopping 56%. This was bolstered by “mega” wind projects at Hornsea and Inchape, 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.
Residential was flat on 2023 but considering inflation, we have probably seen another dip of housebuilding awards this year. Commercial & retail has recovered from its dip in 2023 and is the highest we’ve seen it in over 5 years.
Finally, Hotel & Leisure contract awards are up on 2023 but has still not recovered back to the levels we saw in 2022.
Planning Approvals dipped 8% from 2023
Planning approvals overall dropped by 8% and figures fell below £100bn. However, a stronger second half of 2024 offers hope for a healthier pipeline in 2025 under a new government.
Despite an overall dip, some sectors and regions saw record highs. Education saw a 16% uplift on 2023, it’s highest year since 2019. Plus, the north west achieved their highest value of approvals for over 5 years.
2024 Planning Applications remained under £100bn
Planning applications once again remained under £100bn and dipped a further 5% on an already poor performing 2023. Due to a subdued performance, the confidence of across the UK built environment is continuing to decrease.
Industrial saw its worst year since the pandemic with a continued dip from 2023. Infrastructure was the only slight positive, up 4% on last year but still significantly below the highs of 2022.
However, Labour’s planning reform offers encouragement to housebuilders, so it is likely we will see an increase in housebuilding applications in 2025.
Download the 2024 Construction Review
Our Construction Industry 2024 Review contains even more insight on the industry’s performance, including additional expert commentary, comprehensive data tables and concise visualisations.
