The latest forecast by Glenigan predicts that longer-term construction projects will benefit from increased public sector investment and that new logistics and warehouse construction will grow to meet the demand for distribution space.
Learn more about the latest “Construction Outlook” forecast for 2019 and 2020 below.
Positive online shopping trends mean that warehousing and logistics premises are forecast to remain a growth area.
Glenigan’s Economics Director Allan Wilén commented:
“The warehousing and logistics market has been a long-term growth area… While [project] starts fell back in the immediate aftermath of the EU referendum vote, this decline was temporary. The growth in the sector is being driven by the structural shift online in consumers’ retail habits.”
Internet shopping is not the only catalyst, however. Heathrow Airport’s new third runway is predicted to boost construction tender leads in the industrial sector. The increased volume of air cargo will create extra demand for warehouse space in the area.
Private Sector Investment
Build to Rent projects are set to continue into 2019/2020, meeting the increasing demand from the private rental sector (PRS).
Build to Rent projects accounted for 7% of overall private housing sector starts from January to October 2018, worth £885 million. London, Manchester and Birmingham emerged as favoured locations.
Public Sector Investment
Glenigan’s forecast predicts that increased public sector spending will balance out any fall in private sector investment.
One area for opportunity highlighted by Glenigan is Network Rail’s £47 billion funding package for 2019 to 2024. Glenigan states that it is an “illustration of the Government’s commitment to greater investment in the built environment.”
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