It was reported in June that construction output and new orders were finally on the up with new projects being awarded hitting a high for 2018. The question was asked, is the construction industry finally climbing out of its slump?

2018 has been a tough year in construction. Aside from the Carillion collapse many main contractors have posted major losses and project delivery has been slow. This has been exacerbated by the ongoing uncertainty of the impacts of Brexit.

In the first half of the year, main contractors reported slower job creation and that many corporate clients seem to be holding back on decision making causing delays in breaking ground on major construction projects. Additionally many local budgets have been cut, reducing the funding available for infrastructure maintenance and development.

Is there sunshine on the horizon?

However, there are some sectors where progress is being ushered in by a demand that cannot be ignored. Highways England are forging ahead with their plans to upgrade several high traffic routes into smart motorways in an effort to ease congestion. The recent government announcement approving the Heathrow Airport expansion is more positive news for the industry.

While the construction sector as a whole is still struggling, there are regional areas reporting positive growth. As business, trade and exports increase in these areas, so do the opportunities for construction. To support the workforce and the burgeoning businesses there will need to be an expansion to networks of road and rail, as well as housing and other related commercial developments.

Regional development hot spots

Two regions reported as hotspots for development in the NatWest business survey are the East Midlands and the North West. The East Midlands is receiving a boost from the ongoing HS2 rail project, ushering in job creation in regional cities such as Sheffield. Once completed it is estimated to bring 6 million passengers to the region a year, supporting development and local economic growth.   HS2 is also playing an important role in supporting development in the Northwest. The region recently hosted an awards evening recognizing excellence in construction for developments and infrastructure that have been completed in the area.

It seems that the best opportunities for contractors exist in these regional hotspots as it is there that growth is currently outperforming the national average. It’s positive news for an industry that is still plagued with negative headlines.