The latest data from the Builders Merchants Buildings Index show that although overall sales were up by +4.3% year on year in Q3 2022, that was largely driven by inflation, with overall volumes being down by -9% in the same quarter.
Looking ahead into 2023, the pan-European research group Euroconstruct are predicting a difficult year in the British construction industry facing a negative growth of -0.4%.
Previous low interest rates led to a boom in new-build housing across Europe, however the economic landscape has changed substantially in the past six months, with housing sales slowing down and consumer confidence dropping, with growth not expected to return until 2024.
These figures were revealed at Euroconstruct’s 94th economic forecast event in London, where researchers from data specialists Experian and Barbour ABI shared their latest findings.
Experian UK chief economist, Mohammed Chaudhri said:
“The Ukraine war and the manifold impacts and uncertainties it induces, rising interest rates, the tightening of the financial market, and the ongoing problems with construction material availability and costs are all playing a significant part.
“Euroconstruct’s November forecast found that nearly all factors which affect construction demand are negative, including the economy, consumer prices, interest rates and consumer confidence. It looks like it could be a rough period of adjustment for the industry, before a return to growth in 2024.”