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NBSLive how to win work- Construction Prospects - by Allan Wilen of @Glenigan

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Presentation on Construction Prospects by Allan Wilen of Glenigan at #NBSLive conference on 26 November 2013

Presentation on Construction Prospects by Allan Wilen of Glenigan at #NBSLive conference on 26 November 2013
http://www.thenbs.com/NBS-Live/

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NBSLive how to win work- Construction Prospects - by Allan Wilen of @Glenigan NBSLive how to win work- Construction Prospects - by Allan Wilen of @Glenigan Presentation Transcript

  • How to win work Construction Prospects for 2014 & 2015 Presented by: Allan Wilén, Economics Director Date: 26th November 2013
  • About Glenigan  The trusted provider of construction industry data, analysis, forecasting, company and project intelligence  Nearly 15,000 users of our information  Established in 1973, now part of the Top Right Group  Clients include companies involved in the design and realisation of construction projects, suppliers of materials and services to the construction industry and organisations monitoring construction activity 2
  • UK Economy  Economic recovery – at last!        Deficit reduction limiting growth Improved manufacturing sector export dependent Access to capital finance remains limited Consumer expenditure & retail sales growth Rising employment Housing market upturn Fragile business confidence View slide
  • Brighter Consumer Prospects? ■ Consumers hard hit since 2007 Real Earnings & Household Spending 6% ■ Households hit by: Weak earnings growth Tax rises Higher inflation Debt levels remain high Uncertain employment prospects ■ Restricted bank lending ■ Rising consumer confidence 5% Real Average Earnings Household Consumption 4% 3% Change on previous year ■ ■ ■ ■ ■ 2% 1% 0% ■ Lower inflation ■ Moving out of recession -1% -2% Sources: ONS & Glenigan Analysis -3% View slide
  • Plethora of Housing Initiatives FirstBuy 10,500 sales Get Britain Building 16,000 units unlocked Funding for Lending NewBuy Mortgage Indemnity Scheme 100,000 sales Help to Buy support for new & existing house sales Public land release 150,000 plots
  • Private Housing  Strong performance in 2012 & 2013  Further growth ahead – Government initiatives lifting market 160,000 Unit Starts Unit Completions 10,000 140,000 120,000 8,000 100,000 6,000 80,000 60,000 4,000 40,000 2,000 20,000 0 0 2008 2009 2010 2011 2012 2013e 2014f 2015f Sources: DCLG, Glenigan Thousands of Units – Improved mortgage finance availability 12,000 Projects Starts Value of Project Starts £m – Gradual rise in household incomes and confidence 180,000
  • Private Non-Residential Activity Private Non-Residential Project Starts Hotels & Leisure 14,000 Retail Offices 12,000 Underlying value of starts - £million  Hesitant recovery in 2013  Firmer growth ahead  Increased investment in prime office space  Industrial resurgence  Retailing restructuring  Hotel & leisure sector prospects brighten 16,000 Industrial 10,000 8,000 6,000 4,000 2,000 0 2007 2008 2009 Source: Glenigan 2010 2011 2012 2013e 2014f 2015f
  • Brighter Prospects for the High Street?  Retailers & retail construction hard hit by recession 4 2 2006 2007 2008 Source: National statistics 2009 2010 2011 2012 Mar Nov Jul Mar Nov Jul Nov Mar Jul Mar Nov Jul Mar Jul Nov Mar 0 Nov  Recent strengthening in retails sales 6 Jul – Rise of the Internet – Click & Collect – Supermarkets move back to the high street 8 Mar  Structural Change Underway 10 Nov Sluggish sales Company failures Rise in vacant floorspace Limited access to capital funding Percent of total retail sales – – – – Internet Sales 12 2013 8
  • Jan-08 Apr-08 Jul-08 Oct-08 Jan-09 Apr-09 Jul-09 Oct-09 Jan-10 Apr-10 Jul-10 Oct-10 Jan-11 Apr-11 Jul-11 Oct-11 Jan-12 Apr-12 Jul-12 Oct-12 Jan-13 Apr-13 Jul-13 Oct-13 Six month rolling totals Retail Construction 100% 80% -60% Retail Starts on Site Detailed Planning Approvals 60% 40% 20% 0% -20% -40% Source: Glenigan
  • Private Sector Recovery Business Services & Finance 108 106 104 102 100 98 96 94 92 2013 Q1 2012 Q3 2012 Q1 2011 Q3 2011 Q1 2010 Q3 2010 Q1 2009 Q3 2009 Q1 2008 Q3 2008 Q1 2007 Q3 2007 Q1 2006 Q3 90 2006 Q1  Financial & Insurance sector still weak  Firm growth in other business services  Higher private sector employment  Increased demand for office accommodation 10
  • Office Construction Central London Office Construction Docklands City West End Total availability 6,000 5 14 12 10 15 8 6 20 4 25 2 Source: Knight Frank 2013 2012 2011 2010 2009 2008 2007 2006 2005 2004 2003 2002 30 2001 0 2000 million sqft 10 Value of scheme starts of less than £100 million 16 Underlying project starts 0 Vacant Office Space (million sqft) - Reverse Scale 18 Office Construction 5,000 4,000 3,000 2,000 1,000 2007 2008 2009 2010 2011 2012 2013e 2014f 2015f Source: Glenigan
  • Property Market & Construction Prospects  Government looking to private sector to lead the recovery  Access to capital gradually improving  Rising consumer confidence  Private housing market engine for growth       Government initiatives build confidence Increase in private housing starts Strengthening Office Market Retail property facing structural change Industrial upturn Refurbishment & retro-fit
  • Private sector drives recovery in 2014 Value of Underlying Project Starts by Sector Change on previous year 2012 2013e 2014f Private Housing Social Housing Industrial Offices Retail Hotel & Leisure Education Health Community & Amenity Civil Engineering Total 36% 9% 32% 39% 11% -3% -27% 6% -27% -6% 5% 3% 2% -5% 11% -7% 1% 9% -5% -6% 4% 2% 9% -23% 12% 8% 24% 13% 5% -12% 9% 9% 4% Source: Glenigan. N.B. Underlying project starts exclude individual projects of £100m or more 13
  • THANK YOU CONTACT Allan Wilén Economics Director Email: allan.wilen@glenigan.com www.glenigan.com