After five years of struggle, Britain’s construction industry showed signs of recovery in November 2017, according to a Telegraph article.
Though commercial building activity has decreased, the level of contraction is lower than recent years. This has been helped by a rise in housebuilding.
The construction industry contracted by 0.9% in Q2 of 2017 and 0.5% in Q3. Howard Archer, Chief Economic Advisor to the EY Item Club, predicts that there could be modest Q4 growth. As well as increased homebuilding, his prediction is supported by the purchasing manager’s index, which is a measure of manufacturing activity. This index rose from 50.3 in October 2017 to 53.1 in November 2017. If manufacturing increases, there should be a corresponding increase in commercial building activity to accommodate business expansion.
The government’s Help to Buy Scheme and other initiatives have encouraged new homebuilding. In the 2016 – 2017 financial year, 217,000 new homes were built in England, which was more than in any other year since the 2008 financial crash. Many builders have taken on extra workers for the increased number of building projects.
After the Brexit negotiations are completed, corporate confidence could improve, and this could encourage companies to invest more, including building new commercial properties to accommodate increased production.
There are many finance sources available for developers to construct new residential and commercial property. Commercial mortgages and bridging loans are offered at modest interest rates to fund construction projects. Loans are also available for converting commercial property for residential use.