As we head into the last few months of 2022, we recognise how far we’ve all come from the gloomy last few years of covid. However, the clouds seem to be continuing into 2023 and 2024. The talk of a recession, baseline borrowing cost currently at 3%, the ongoing cost-of-living crisis, the unstable government and the estimated £60 billion tax rises & spending cuts we’re waiting on Jeremy Hunt confirming for his Autumn Statement all seem to be culminating into a perfect storm.
It was also reported this week that the CPI rose by 10.1% over the last 12 months and may reach 11% before the end of the year.
With all these factors and economic instability, how does this affect the Construction industry?
Like many sectors, the construction industry will not go unscathed. 2022 has seen a continual rise in construction material costs and the most recent Building Materials & Components Index reported a 16.7% increase for “All Work” for September 2022 year on year.
The Construction Products Association (CPA) has forecasted a fall of 3.9% for 2023 with contributing factors of a fall in real wages and the potential further rise in interest rates which all impact in consumer spending. The CPA also went on to note the sector mainly impacted would be the private housing new build and private housing repair which would make sense due to the rising rates and uncertainty in the economic market. They also highlighted commercial, and infrastructure sectors would be impacted due to construction cost inflation. (Source: https://www.constructionproducts.org.uk/news-media-events/news/2022/november/cpa-autumn-forecast-2022/)
Can you control your construction costs?
Unfortunately, there are no quick fixes or easy solutions for this but there are some practical steps that can be taken to help control some of your costs.
At KDM, you can count on us to help you find ways to reduce your construction & fit-out costs. Get in touch with us today to learn about our services and more.
KDM is a Principal contractor and specialist fit-out contractor who also manufactures and designs in the construction sector. We are based in Dalgety Bay and have regional hubs in Leeds, Warrington, Chelmsford, Dublin and Zeeland, Netherlands. We operate locally, nationally, and multi-nationally for many blue-chip clients throughout the UK and EU.