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Construction - UK - April 2019

Market Segmentation

  • Housing
  • Commercial
  • Industrial
  • Public Non-residential
  • R & M

Company Profiles

  • Balfour Beatty
  • Barratt Developments
  • Interserve
  • Kier Group
  • Persimmon
  • Taylor Wimpey

“Construction is notoriously cyclical, but there are many factors influencing individual sectors and their cycles do not coincide with each other. To date, Brexit is impacting demand for commercial construction more than industrial construction, while public sector activity is more reliant on government policy, and housing remains buoyant.”
– Terry Leggett, Senior Analyst

This report looks at the following areas:

  • Universities – the hidden gem
  • Who will solve the housing crisis?
  • The high street needs to change

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What's included

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Reduced level of growth
              • Figure 1: The construction market, 2014-18
            • New housing still buoyant
              • Figure 2: Segmentation of housing new construction output, 2014-18
            • Brexit starting to impact new commercial construction
              • Figure 3: New commercial construction output, 2014-18
            • Less obvious Brexit impact on industrial new construction
              • Figure 4: New industrial construction output, 2014-18
            • Government policy restricting public non-residential activity
              • Figure 5: Public non-residential construction output, 2014-18
            • R&M growth slowing
              • Figure 6: R&M construction output, 2014-18
            • Difficult short-term prospects
              • Figure 7: Forecast construction market, 2019-23
            • Companies and brands
              • A very unusual industry structure
                • Figure 8: Employment profile of the construction industry, 2017 (000 employees)
              • Sole traders and SMEs active across trades and contracting sectors
                • Figure 9: Composition of main construction trades by size of company (number of companies and number of employees)
              • What we think
              • Issues and Insights

                • Universities – the hidden gem
                  • The facts
                    • The implications
                      • Who will solve the housing crisis?
                        • The facts
                          • The implications
                            • The high street needs to change
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Cyclical, but different cycles
                                    • The Brexit impact is not clear
                                      • Sectors showing differing trends
                                      • Market Size

                                        • Slowing growth
                                          • Figure 9: The construction market, 2014-18
                                        • Even R&M output growth slowed
                                          • Figure 10: Comparison of new construction and R&M output, 2014-18
                                      • Market Segmentation

                                        • R&M leads the market
                                          • Figure 11: Segmentation of the construction market, 2018 (% of total)
                                        • Major differences in growth between sectors
                                        • Segmentation: Housing

                                          • Strong private sector growth
                                            • Figure 12: Segmentation of housing new construction output, 2014-18
                                            • Figure 13: UK house building completions, 1970-2018
                                            • Figure 14: Comparison of social and private housing completions, 1970-2018
                                          • Activity gained momentum throughout year
                                            • Figure 15: Quarterly house new construction output, 2018
                                          • Almost a third of market satisfied by micro companies
                                            • Figure 16: Housing output segmentation by size of company, 2018
                                          • Housing – a broken market for decades
                                            • Government supply and demand initiatives
                                            • Segmentation: Commercial

                                              • Brexit uncertainty starts to impact
                                                • Figure 17: Long-term trend in private commercial construction, 1970-2018
                                              • Reduced output in most sectors in 2018
                                                  • Figure 18: Segmentation of private commercial construction output, 2014-18 (£ million)
                                                • Flat market after first quarter
                                                  • Figure 19: Quarterly private commercial new construction output, 2018
                                                • SMEs command 61% of the market
                                                  • Figure 20: Private commercial output segmentation by size of company, 2018
                                              • Segmentation: Industrial

                                                • Brexit effect not yet evident
                                                  • Figure 21: Long-term trend in private industrial construction, 1970-2018
                                                • Factory and warehouse demand growth
                                                  • Figure 22: Segmentation of private industrial construction output, 2014-18 (£ million)
                                                • Deteriorating output in 2018
                                                  • Figure 23: Quarterly private industrial new construction output, 2018
                                                • Micro companies gain 24% of output
                                                  • Figure 24: Private industrial output segmentation by size of company, 2018
                                              • Segmentation: Public Non-residential

                                                • Government policy restricting activity
                                                  • Figure 25: Long-term trend in public non-residential construction, 1970-2018
                                                • Entertainment – the star of the show in 2018
                                                  • Figure 26: Segmentation of public non-residential construction output, 2014-18 (£ million)
                                                • Output fell off in Q4
                                                  • Figure 27: Quarterly public non-residential new construction output, 2018
                                                • A major market for enterprises
                                                  • Figure 28: Public non-residential output segmentation by size of company, 2018
                                              • Segmentation: R&M

                                                • R&M benefits from house price inflation and economic uncertainty
                                                  • Figure 29: R&M construction output, 2014-18
                                                • Various influences
                                                  • Figure 30: Segmentation of R&M output, 2018 (£ million)
                                                • Private housing R&M
                                                  • Figure 31: Private housing R&M output, 2014-18
                                                  • Figure 32: Private housing R&M output segmentation by size of company, 2018
                                                • Public housing R&M
                                                  • Figure 33: Public housing R&M output, 2014-18
                                                  • Figure 34: Public housing R&M output segmentation by size of company, 2018
                                                • Non-residential private R&M
                                                  • Figure 35: Private non-residential R&M output, 2014-18
                                                  • Figure 36: Private non-residential R&M output segmentation by size of company, 2018
                                                • Non-residential public R&M
                                                  • Figure 37: Public non-residential R&M output, 2014-18
                                                  • Figure 38: Public non-residential R&M output segmentation by size of company, 2018
                                              • Market Forecast

                                                • Short-term disruption
                                                  • Figure 39: Forecast construction market, 2019-23
                                                • Continued divergence of sector performance
                                                  • Strong new housing prospects
                                                    • Figure 40: Forecast new housing market, 2019-23
                                                  • Short-term difficulties in private non-residential
                                                    • Figure 41: Forecast private non-residential new construction, 2019-23
                                                  • Public non-residential construction continues to reflect restrictions
                                                    • Figure 42: Forecast public sector non-residential new construction, 2019-23
                                                  • Varied influences on R&M activity
                                                    • Figure 43: Forecast R&M activity, by sector, 2019-23
                                                • The Impact of the Economy

                                                  • GDP
                                                    • Figure 44: GDP overall quarterly development, Q1 2015-Q4 2018
                                                    • Figure 45: GDP quarterly development, by sector, 2004-18
                                                    • Figure 46: Forecast GDP development, 2019-2023
                                                • Market Trends

                                                  • Offsite construction/prefabrication
                                                    • Adaptive reuse
                                                      • Greener and smarter buildings
                                                        • BIM
                                                        • Market Drivers

                                                          • The productivity issue
                                                            • Figure 47: Construction productivity compared with whole economy, 1997 Q1-2018 Q3 (index, 1997 Q1 = 100)
                                                          • The housing issue
                                                            • Government policy
                                                              • Brexit
                                                              • Companies and Brands – What You Need to Know

                                                                • The disconnect between number of companies and turnover
                                                                  • Figure 48: The role of companies in residential and non-residential construction (% of companies and output)
                                                                • Construction has a very unusual employment profile
                                                                  • Figure 49: Employment profile of the construction industry, 2017 (000 employees)
                                                              • Industry Structure

                                                                • Growing number of companies
                                                                  • Figure 50: Number of companies active in construction, 2013-17
                                                                • A mix of general contractors and trades
                                                                  • Figure 51: Development of the main contractors, 2013-17
                                                                • Vast numbers of sole traders and SMEs
                                                                  • Figure 52: Composition of main construction trades by size of company (number of companies and number of employees)
                                                                  • Figure 53: Employment profile of the construction industry, 2017 (000 employees)
                                                              • Industry Strategies

                                                                • So many issues to tackle
                                                                • Company Profiles

                                                                  • Balfour Beatty
                                                                    • Activity
                                                                      • Performance
                                                                        • Figure 54: Segmentation of Balfour Beatty Revenues, 2018 (£ million)
                                                                      • Strategy
                                                                        • Barratt Developments
                                                                          • Activity
                                                                            • Performance
                                                                              • Figure 55: Financial performance of Barratt Developments, 2014-18
                                                                              • Figure 56: Geographic breakdown of house completions by Barratt Developments, 2018
                                                                              • Figure 57: Profile of houses completed by Barratt Developments, by type, 2018
                                                                            • Strategy
                                                                              • Interserve Group
                                                                                • Activity
                                                                                  • Performance
                                                                                    • Figure 58: Financial performance of Interserve (£ million)
                                                                                  • Strategy
                                                                                    • Kier Group
                                                                                      • Activity
                                                                                        • Performance
                                                                                          • Figure 59: Financial performance of Kier Group, 2014-18 (£ million)
                                                                                        • Strategy
                                                                                          • Persimmon
                                                                                            • Activity
                                                                                              • Performance
                                                                                                • Figure 60: Financial performance of persimmon, 2014-18 (£ million)
                                                                                              • Strategy
                                                                                                • Taylor Wimpey
                                                                                                  • Activity
                                                                                                    • Performance
                                                                                                      • Figure 61: Financial performance of taylor wimpey, 2014-18 (£ million)
                                                                                                      • Figure 62: Regional breakdown of Taylor Wimpey activity, 2018 (Number)
                                                                                                    • Strategy
                                                                                                    • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                        • Abbreviations
                                                                                                          • Methodology
                                                                                                          • Further Sources and Contacts

                                                                                                            • Trade associations
                                                                                                              • Trade magazines
                                                                                                                • Trade events

                                                                                                                Construction - UK - April 2019

                                                                                                                US $1,272.90 (Excl.Tax)