An air of optimism has been reported in the latest Construction Market Intelligence from cost consultant and Thames Tap partner Rider Levett Bucknall (RLB).
Its Q3 report for 2024 notes market optimism, bolstered by the Government’s planning policy reform proposals.
While levels of site acquisitions are steady, the report mentions a healthy number of change-of-use proposals for redundant offices. That includes repurposing or demolition for life sciences, residential or industrial space.
Although there had been stagnation because of the General Election, RLB is hopeful that planning policy changes and improved resources will make it easier for projects to come through the system.
However, profit warnings and insolvencies among main contractors are causing a degree of nervousness across client organisations and the supply chain. But RLB says material and labour cost inflation are becoming more stable and profit margins should become more manageable.
The report notes some tender price inflation but says it expects a steady upwards trajectory over the next year although labour shortages remain an issue.
James Miller, senior associate, RLB South East (pictured), said: “With the new Government’s commitment to build 1.5 million new homes by 2029, almost doubling the anticipated delivery this year, the construction industry will need to embrace all forms of construction to meet these targets.
“This is especially true given that other housing demands, such as retrofit and maintenance programmes, need to be delivered by the same limited supply chain.
“Labour shortages are affecting pricing levels on projects generally. Long-term thinking and government and industry initiatives are needed to close the skills gap.”
Across the key sectors, life sciences development continues to replace commercial office space and a number of lettings have been reported. Major data centre schemes are being witnessed while the education sector has been affected by the drop in numbers of international students, although some universities continue to invest in capital programmes.
Click here to read RLB’s full Construction Market Intelligence Q3 2024.
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