Construction Industry Update – February 2024

Construction buyers see happier times ahead

Optimism levels among construction buyers have hit their highest levels in two years.

Results from the bellwether S&P Global UK Construction Purchasing Managers’ Index in January showed a strong improvement in business activity expectations as the main index registered 48.8 – up from 46.8 in December and the highest reading since August 2023.

But the index remained below the crucial 50.0 no-change threshold for the fifth month running and signalled a moderate decline in total industry activity.

Around 51% of the survey panel forecast a rise in business activity during the year ahead, while only 12% predict a decline – the highest level of business optimism since January 2022.

Student and flat jobs shoring up regional city workloads

Residential and purpose-built student housing-led projects are supporting construction activity across the UK’s four major regional cities.

According to the Deloitte Regional Crane Surveys, flats and student room projects are helping to offset the project slowdown in the central areas of Belfast, Birmingham, Leeds, and Manchester.

Development activity remained strong in 2023 with the four cities collectively recording 63 new construction starts, although this was still down from 74 in 2022.

New green rules for housing schemes

All major housing development are required from today to deliver at least 10% benefit under new government Biodiversity Net Gain rules.

Developers in England are now legally required to deliver at least a 10% increase biodiversity when major building projects are undertaken.

To help Local Planning Authorities integrate Biodiversity Net Gain at local level, £10.6m of funding is being committed to help local authorities recruit and expand ecologist teams.

Plan to turbo charge housing on brownfield land

Building homes on brownfield land will be turbocharged under a major shake-up to planning rules to boost house building protecting the Green Belt.

As part of its long-term plan for housing, the Government announced today that planners in England’s 20 largest cities and towns will be told to adopt an overarching presumption in favour of house building brownfield land.

This rule will apply if house building drops below expected levels as is presently proving the case. London councils will particularly come into the spotlight.

The Government is also helping developers overcome bureaucracy by slashing red tape that stops derelict sites and unused buildings being turned into new homes.