Construction Industry 2009 - Market Review

Executive Summary

The total output of the construction industry in Great Britain was estimated at £123.24bn in 2008, an increase of 20.5% on the figure for 2004. Output rose each year between 2005 and 2008, but the growth rate slowed to just 1.1% in the latter year — the lowest figure recorded over the period, a result of the severe downturn now affecting the UK economy.

This Key Note Market Review focuses on four main sectors of the UK construction industry: housebuilding, infrastructure, industrial construction and commercial construction. It also includes a detailed examination of the UK market for building materials. The largest sector overall (excluding repair and maintenance) is commercial construction, followed by housebuilding. The infrastructure and industrial sectors are much smaller.

The UK construction industry faces serious challenges. In 2008, problems in the US sub-prime mortgage market triggered a catastrophic crash in the US banking sector, which in turn created problems in UK financial markets. Some UK banks now have a significant degree of government control and credit is very difficult to obtain, for either domestic or business purposes.

Individual sectors of the construction market also have their own specific challenges. In the housebuilding sector, for example, the Government has plans to build more homes but a shortage of buyers in the current market conditions is impeding progress. Fast-track construction techniques are facilitating more cost-effective housebuilding, but even this development is not having much effect on the affordability of housing. Although house prices are now falling, mortgages are still expensive for the many people who need to borrow a large sum of money in relation to the property price.

The infrastructure sector is the least affected by the economic downturn and has benefited from government investment in transportation. Public spending on hospitals and education, including Public Private Partnerships (PPPs), is an important factor in the commercial sector. However, offices and retail activities in the commercial sector are now experiencing a downturn, due to the problems in the banking industry and reduced consumer spending. Inevitably, the reduction in construction activity is having a knock-on effect on the building-materials sector. Some suppliers of building materials are closing or `mothballing' plants and implementing job cuts.

In terms of the future, by far the most important concern is the length and depth of the current recession. Continued volatility in energy markets will pose an additional challenge for the construction industry, because energy is a significant factor in material prices. Sustainability, the drive to reduce carbon emissions and the pressure to reduce the use of fossil fuels will also increase in importance and will create extra costs for the industry.

Executive Summary
1. Industry Overview
Report Coverage
Definitions
Government Classifications
General Construction And Demolition Work
Construction And Repair Of Buildings
Civil Engineering
Installation Of Fixtures And Fittings
Building Completion Work
Public And Private Sectors
Type Of Work
New Work
Repair And Maintenance Work
Public Private Partnerships
Report Background
Economic Trends
Population
Table.1: Uk Resident Population Estimates By Sex (000), Mid-years-2007
Gross Domestic Product
Table.2: Uk Gross Domestic Product At Current And Annual Chain-linked Prices (£m),-2007
Inflation
Table.3: Uk Rate Of Inflation (%),-2007
Unemployment
Table.4: Actual Number Of Unemployed Persons In The Uk (million),-2007
Household Disposable Income
Table.5: Uk Household Disposable Income Per Capita (£),-2007
Market Size
Table.6: The Construction Market In Great Britain By Sector By Value At Current Prices (£m),-2008
Figure.1: The Construction Market In Great Britain New Work By Value At Current Prices (%),
Overseas Trade
Table.7: Uk Overseas Trade In Construction Services By Value (£m),-2007
Market Segmentation
Housebuilding
Private-sector Housing
Public-sector Housing
Infrastructure
Industrial Construction
Commercial Construction
Building Materials
Industry Structure
Concentration
Number Of Uk Businesses
Table.8: Number Of Uk Vat- And/or Paye-based Enterprises Engaged In Construction Work By Sector,
Employment
Table.9: Employment In The Uk Construction Industry By Type Of Contract (000),-2007
Table.10: Employment In The Uk Construction Industry By Type Of Contract By Sex (000 And %),-2007
Distribution
Table.11: Contractors' Output In Great Britain By Region (£m),
Market Position
Europe
Table.12: Population Of Eu Member States (000),st January
Table.13: Construction's Share Of Gross Value Added In Eu Member States (%),-2007
Worldwide
Key Trends
Credit Squeeze
Sustainability
Housing Shortage
Affordable Housing
New Building Techniques
Rising Energy And Material Prices
Legislation And Regulation
Aggregates Levy
Building Regulations
Ce Marking
Climate Change Levy
Key Trade Associations
Building Services Research And Information Association
Chartered Institute Of Building
Construction Confederation
Construction Industry Council
Construction Products Association
Constructionskills
Engineering Construction Industry Association
European Construction Forum
European Construction Industry Federation
2. Pest Analysis
Political Factors
Economic Factors
Social Factors
Technological Factors
3. Top-management Review
Introduction
Health And Safety
Environment And Sustainability
Human Resources
Community
Customer Satisfaction
Summary
4. Competitive Structure
The Marketplace
Market Leaders
Balfour Beatty Plc
Financial Results
Carillion Plc
Financial Results
Costain Group Plc
Financial Results
Galliford Try Plc
Financial Results
John Laing Group
Financial Results
Kier Group Plc
Financial Results
Laing O'rourke Plc
Financial Results
Morgan Sindall Plc
Financial Results
Skanska Uk Plc
Financial Results
Vinci Plc
Financial Results
Outside Suppliers
Land
Building Materials
Plant And Machinery
Marketing Activity
5. Housebuilding
Definition
Dwelling
Tenure
Registered Social Landlords
Social And Affordable Housing
Stages Of Construction
Housing Starts
Housing Completions
Key Trends
Steep Decline In Housing Transactions
Table.1: Number Of Residential Property Transactions In The Uk (000), Quarter-quarter
Collapse In Mortgage Approvals
Table.2: Number Of Loans For House Purchases, January-october And
Decline In Number Of Housing Starts
Falling House Prices
Climate Change
Housing Shortage And Affordable Housing
Fast-track Housebuilding
Market Size
Table.3: The Housebuilding Market In Great Britain By Sector By Value At Current Prices (£m),-2008
Figure.1: The Housebuilding Market In Great Britain By Value At Current Prices (£m),-2008
Table.4: Number Of Housing Starts And Completions In The Uk By Sector,/2004-2007/2008
Supply Structure
Number Of Companies And Employment
Distribution
Key Trade Associations
Home Builders Federation
National House-building Council
Major Players
Barratt Developments Plc
Bellway Plc
The Berkeley Group Holdings Plc
Persimmon Plc
Taylor Wimpey Plc
Other Companies
Marketing Activity
Buying Behaviour
Table.5: Penetration Of Home Ownership And Rental In Great Britain By Sex, Age, Social Grade And Region (% Of Adults),
Table.6: Profile Of Home Ownership And Rental In Great Britain By Sex, Age, Social Grade And Region (% Of Owners/renters),
Forecasts
Table.7: The Forecast Housebuilding Market In Great Britain By Sector By Value At Current Prices (£m),-2013
Table.8: Forecast Number Of Housing Starts And Completions In The Uk,/2009-2012/2013
6. Infrastructure
Definition
Key Trends
Roads
Railways
Airports
Water And Sewerage
Market Size
Table.1: The Infrastructure Market In Great Britain By Sector By Value At Current Prices (£m),-2008
Figure.1: The Infrastructure Market In Great Britain By Value At Current Prices (£m),-2008
Supply Structure
Number Of Companies And Employment
Distribution
Key Trade Associations
Chartered Institute Of Building
Civil Engineering Contractors Association
Construction Confederation
Construction Industry Council
Institution Of Civil Engineers
Major Players
Balfour Beatty Plc
Carillion Plc
Costain Group Plc
Morgan Sindall Plc
Marketing Activity
Buying Behaviour
Table.2: New Orders Received By Contractors For Infrastructure In Great Britain By Sector By Value At Current Prices (£m),-2008
Table.3: New Orders Received By Contractors For Infrastructure In Great Britain By Type Of Work By Value At Current Prices (£m),-2008
Forecasts
Table.4: The Forecast Infrastructure Market In Great Britain By Value At Current Prices (£m),-2013
7. Industrial Construction
Definition
Key Trends
Recovery In Manufacturing?
Warehousing
Market Size
Table.1: The Industrial Construction Market In Great Britain By Sector By Value At Current Prices (£m),-2008
Figure.1: The Industrial Construction Market In Great Britain By Value At Current Prices (£m),-2008
Supply Structure
Number Of Companies And Employment
Distribution
Key Trade Associations
Chartered Institute Of Building
Construction Confederation
Construction Industry Council
Major Players
Balfour Beatty Plc
Costain Group Plc
Kier Group Plc
Skanska Uk Plc
Marketing Activity
Buying Behaviour
Table.2: New Orders Received By Contractors For Industrial Construction In Great Britain By Sector By Value At Current Prices (£m),-2008
Forecasts
Table.3: The Forecast Industrial Construction Market In Great Britain By Value At Current Prices (£m),-2013
8. Commercial Construction
Definition
Offices
Schools And Colleges
Universities
Shops
Entertainment
Health
Garages
Agriculture
Miscellaneous
Key Trends
Offices
Education
Shops
Entertainment
Health
Market Size
Table.1: The Commercial Construction Market In Great Britain By Sector By Value At Current Prices (£m),-2008
Figure.1: The Commercial Construction Market In Great Britain By Value At Current Prices (£m),-2008
Supply Structure
Number Of Companies And Employment
Distribution
Key Trade Associations
Chartered Institute Of Building
Construction Confederation
Construction Industry Council
Major Players
Balfour Beatty Plc
Carillion Plc
Costain Group Plc
Galliford Try Plc
John Laing Plc
Kier Group Plc
Marketing Activity
Buying Behaviour
Table.2: New Orders Received By Contractors For Commercial Construction In Great Britain By Sector By Value At Current Prices (£m),-2008
Forecasts
Table.3: The Forecast Commercial Construction Market In Great Britain By Value At Current Prices (£m),-2013
9. Building Materials
Definition
Key Trends
Sustainability And Recycling
Building Materials For Fast-track Construction
Reduction In Carbon Emissions
Rising Energy And Material Costs
Market Size
Sand And Gravel
By Value
By Volume
Table.1: Uk Sales Of Sand And Gravel By Volume (million Tonnes),-2007
Concrete Products For Construction
By Value
Table.2: The Apparent Uk Market For Concrete Products For Construction By Value (£000 At Msp),-2007
By Volume
Table.3: The Apparent Uk Market For Concrete Products For Construction By Sector By Volume (000 Tonnes),-2007
Ready-mixed Concrete
By Value
Table.4: The Apparent Uk Market For Ready-mixed Concrete By Value At Current Prices (£000 At Msp),-2007
By Volume
Table.5: The Apparent Uk Market For Ready-mixed Concrete By Volume (000 Tonnes),-2007
Cement
By Value
Table.6: The Apparent Uk Market For Cement By Value At Current Prices (£000 At Msp),-2007
By Volume
Table.7: Cement Production In Great Britain By Volume (million Tonnes),-2007
Wood-based Panels
By Value
Table.8: The Apparent Uk Market For Wood-based Panels By Value At Current Prices (£000 At Msp),-2007
By Volume
Bricks
By Value
Table.9: The Apparent Uk Market For Bricks By Value At Current Prices (£000 At Msp),-2007
By Volume
Table.10: The Apparent Uk Market For Bricks By Volume (million),-2007
Clay Roofing Tiles
By Value
Table.11: The Apparent Uk Market For Clay Roofing Tiles By Value At Current Prices (£000 At Msp),-2007
By Volume
Table.12: The Apparent Uk Market For Clay Roofing Tiles By Volume (million),-2007
Slate
By Value
Table.13: The Apparent Uk Market For Slate By Value At Current Prices (£000 At Msp),-2007
By Volume
Supply Structure
Number Of Companies
Table.14: Number Of Uk Vat- And/or Paye-based Enterprises Engaged In The Manufacture Of Building Materials By Sector,
Key Trade Associations
Brick Development Association
British Aggregates Association
British Cement Association
British Precast Concrete Federation
Builders Merchants Federation
Concrete Block Association
Construction Products Association
Council Of European Producers Of Materials For Construction
Federation Of Master Builders
Glass And Glazing Federation
Gypsum Products Development Association
Metal Cladding And Roofing Manufacturers Association
Quarry Products Association
Timber Trade Federation
Major Players
Aggregate Industries Holdings Ltd
British Gypsum
Cemex Uk
Hanson Ltd
Ibstock Brick Ltd
Jeld-wen Uk Ltd
Lafarge Uk
Pilkington Group Ltd
Tarmac Ltd
Marketing Activity
Buying Behaviour
Forecasts
10. A Global Perspective
Global Overview
The Us Market
Table.1: Number Of Housing Starts In The Us (000),-2007
Table.2: Number Of Housing Starts In The Us (000), Years Ending January To September And
The European Market
Table.3: The European Construction Market By Sector By Value (%),
11. The Future
Introduction
Table.1: Economic Forecasts For The Uk (000, % And Million),-2012
Forecasts
Table.2: The Forecast Construction Market In Great Britain By Sector By Value At Current Prices (£m),-2013
Market Growth
Figure.1: The Construction Market In Great Britain By Value At Current Prices (£m),-2013
Future Trends
Consequences Of Instability In Financial Markets
Volatile Energy Markets
Workforce Skills
New Construction Methods
Environmental Issues
Major Projects
Planning Changes
12. Further Sources
Associations
General Sources
Government Sources
Other Sources
Key Note Sources