The UK construction sector's output growth is shifting
In 2022, UK construction outperformed other European countries:
- UK growth: 5.6%
- European average: 3.0%
But this year, the UK's output is expected to decline:
- UK projected drop: -1.5%
- Europe predicted drop: -1.1%
Countries with significant drops:
- Finland: -5.9%
- Sweden: -8.2%
- Hungary: -7.6%
On the bright side, some countries are growing:
- Spain: 3.2%
- Ireland: 2.1%
- Portugal: 1.2%
- UK faces higher construction price inflation:
- UK inflation: 8.1%
- Europe average: 6.5%
Looking ahead to 2024:
- UK forecasted growth: 1.1%
- France growth: 0.7%
- Germany growth: -1.6%
- Europe average forecast: -0.7%
Analysts Barbour ABI explain the drop:
- Inflation, interest rate hikes, and global economy impact
Challenges in the residential sector:
- Europe's major factor in negative forecast
- UK expected residential drop: 7.1%
- Sweden could see over 30% fall
Barbour chief economist Tom Hall's insights:
- Europe experienced an unexpected bump last year
- Transitional period ending
- Continent feeling the effects of interest rates, inflation, and fading post-Covid recovery
- UK faring well compared to France and Germany
- Challenges and uncertainty still ahead
