25th April 2017 • Paul Chaffe
Construction forecasting and employment predictions across the South West region.
According to the CITB Construction Employment Forecast for the South West, construction output in the region is set to grow at an annual rate of 3.1% up to the year 2021. This gives the South West construction sector the second fastest rate of growth after Wales. With an annual recruitment requirement of 4,180, construction employment within the South West is projected to reach just under 235,000 – a 4% increase on the outturn for 2015.
Whilst the UK wide employment growth rate is set to average 0.6% per year between 2017 and 2021, the South West is predicted to average a slightly higher rate at 0.7%. Essentially, construction output in the South West is rising, and predicted to continue rising; with output from the first three quarters of 2016 totalling £8.7bn.
There are various key drivers for growth in the sector, principally, the Hinkley Point C nuclear development.
It is anticipated that the construction landscape within the South West will be “dominated by new nuclear build during most of the 2020's and beyond”.
Following the approval for the build of the Hinkley Point C nuclear station in the latter half of 2016, the infrastructure sector in the South West region is set to be the primary driver for expansion. With an average annual growth of 17%, annual infrastructure growth in the region will drive pretty much all construction growth.
Whilst there are a couple of other infrastructure projects underway – such as the Metro West project which focuses on enhancing commuter transport within Bristol and the A30 Carland Cross to Chiverton upgrade (which is scheduled to start in 2020) – without Hinkley Point the consensus is that the prospects for the South West infrastructure sector would be fairly dull.
However, Hinkley Point isn’t the only driver for growth within the South West construction sector…
The other key area for output growth is predicted to be housing. This includes both public and private housing, with growth anticipated to be proportionately more in the South West than in the UK as a whole. Indeed, housing, new work and repair and maintenance is more important within the South West than the wider UK; contributing 48% of annual output in comparison to the UK’s 40%.
After growth in new orders in 2016 (increasing 21% on the same period in 2015), housing is expected to support output growth for the next two years before 2018 – providing an annual growth rate of 2.3%. Decent growth can be seen in the private housing sector, with an annual average expansion of 4% projected over the next two years.
Some growth is expected from the public sector within the South West, averaging 3.7% a year over the next five years. One of the most active housing associations within the Bristol, Somerset and Avon region is Knightstone Housing Association, who are currently taking forward 132 units for rent and 71 units for shared ownership across several South West sites, in addition to 66 retirement units in Taunton.
As the South West’s public non-housing sector is heavily skewed towards defence, defence related works are set to drive growth of around 3.6% a year on average.
The Army Basing Plan, covering the relocation of units currently stationed in Germany, is now underway. With a focus on bringing these units back to the UK by 2019, construction work at Larkhill Barracks on Salisbury Plain is beginning. With the defence share of current and planned non-housing projects in the public sector at 42% and 53% in the Glenigan database respectively, defence in the South West is a key contributor for construction industry growth.
However, there is much less set in the pipeline once the Army Basing Plan completes in 2019, and as such the growth in public non-housing output is expected to be modest at less than 1% a year between 2017-2021.
At Thatcher Associates, we work closely with our clients on a range of construction projects across the South West. Taking an active role in schemes such as the Army Basing Plan, we are always looking for talented construction professionals based within the South West region. Please register your CV online or give a member of our team a call on 0117 934 9555 to learn more about the construction roles we are currently recruiting for and the opportunities available to you.
*all figures are from the CITB Employment Forecast linked above