Will Construction costs go up or down in 2023?

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.

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.

• By using a complete turnkey supplier like KDM, you mitigate the need for design & cost management which can be costly. You can streamline the process & have a clear timeline which reduces the opportunity for any hidden costs.