Who’d be a forecaster these days?
With the UK economy in Q3 showing 0.8% growth, construction led the way with a 2.5% increase. But despite this, construction output will be down by around by 1.5-2% this year before growing by c2.5% in 2014 and by 4% in 2015.
As has been making the news, housing is leading the way. Boosted by government incentives, house-builders are busy and prices are rising as we try to make up for the severe shortfall in housing provision.
Beyond housing, the other key area for growth – and one that is true for many countries and is a favourite of our government – is infrastructure. This covers both transport (notably rail, with Crossrail and maybe HS2) and energy. With the nuclear project in Somerset finally agreed (?), we see major expenditure in the energy sector given the need to meet EU targets by 2020. This is despite that fact that there continue to problems with planning and incentives in other areas such as onshore and offshore wind farms.
But what else is there to look forward to? There is little consensus over the private commercial market, with no clear picture emerging for offices in particular. The conventional view remains London first, the rest nowhere, although there are definite signs of improvement in the major cities.
We can see a number of niche sectors which look promising for the more focused companies with relevant track records. They include student accommodation, medical centres, budget hotels, convenience stores and football stadia.
As we said earlier, who’d be a forecaster?!
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