2017 will be a year of winners and losers in construction

The year to come will divide the UK construction industry into winners and losers. That’s the prediction of Richard Threlfall, head of infrastructure, building and construction at KPMG.

Speaking to Construction Enquirer, Mr Threlfall indicated that 2017 is likely to be one of “feast or famine” depending on what sector of construction you specialise in, as well as regional variations. He pinpointed specific areas of growth and decline:

The winners

• Infrastructure – contractors in infrastructure will win more work as Government continues to invest heavily in road, rail and energy projects, particularly the three Hs – Heathrow, HS2 and Hinkley Point.

• West Midlands – the Government has pledged its continued commitment to HS2, despite public lobbying to cancel it. The HS2 “effect” has already seen upward investment in the region.

The losers

• Commercial – contractors who rely primarily on commercial work will see a decline in demand in 2017 as lack of clarity over Brexit delays investment decisions in the commercial sector.

• London – again, worries over Brexit will see some deflation of the London housing bubble.

Challenges across the board

Mr Threlfall went on to outline several pain points facing the construction industry as a whole in the year to come, including:

• Rising price of materials
• Skills shortages
• Curbs on provision of labour from Europe
• Rising inflation and erosion of buying power

Nevertheless he pressed home the point that success in the construction industry will be achievable for those who keep their eye on the prize:

“Amidst all this macro-economic uncertainty, construction industry CEOs need to keep focused on the prize of achieving competitive advantage through offering clients greater efficiency and predictability. Whilst politics and economics may dictate the winners and losers of 2017, in the long-run this industry will be owned by those who invest in technology and skills”.

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