Construction and the Built Environment

The situation in the Yorkshire and Humber (Y&H) region at the moment is delicate. Current predictions show that the annual average economic growth in the region is forecast at 1.3% between 2009 and 2013, slightly slower than across the UK as a whole.

Output

Construction output in the UK will see significant contraction this year (8%), with a smaller fall in 2010 before a recovery sets in. Within the Construction industry the output totalled £6.8bn, in 2000 prices, in 2007, around 8% of the UK total.

Unfortunately forecasts are predicting between the years 2009 and 2013 output is forecast to stagnate in the region, in contrast to the national average growth rate of 0.5% per year. Over the 2010-2014 period construction output growth in Y&H is expected to be only moderate, with average annual growth of 1%, slightly below the UK figure of 1.4%.

Sector Spending

The most buoyant sectors over the period are expected to be in public housing and infrastructure, in particular Building Schools for the Future (BSF). Y&H will do well out of Waves 1-4; six large projects with a total funding stream of over £1.6bn.

The worst affected sector in the region, as like most of the UK is expected to be private housing, with output down by around a third. The region has a number of big mixed-use regeneration projects in the pipeline, but these have been mothballed e.g. Trinity Quarter in Leeds. In the latter half of 2010-2014 periods a strong recovery in private housing is forecast, as credit conditions ease and demand returns.

The infrastructure sector returns to growth from 2010, with £1bn project to improve sections of the M1 & M62. As disposable income begins to rise again, the housing R&M (repair & maintenance) sector will see growth return in 2011, although this will be marginal. However the public non-housing is set to be hit from 2012 as the government is likely to cut expenditure in order to reduce public debt.
Key areas of growth over the period 2007-2013 are forecast to be infrastructure and public sector spending. R&M (Repair & Maintenance) will also see significant growth.

Employment

Construction employment figures in Y&H began declining even before the current recession took hold, after peaking at 234,000in 2006. By 2010 employment will have declined by 16% to around 197,000. It is expected to fall this year and next, declining by 13.4% in total, with the majority of the fall concentrated in 2009. Construction employment is projected to fall heavily between 2008 and 2010 and see a modest improvement thereafter, increasing by 4% between 2010 and 2014. This is a slightly larger decline than across the UK as a whole. Looking beyond 2010, the workforce is expected to expand to nearly 205,000 by 2014, an increase of 4% from its size in 2010. The largest increases in construction-specific occupations are civil engineering operatives, labourers and scaffolders.

The annual recruitment requirement (ARR) for Y&H for the period of 2010 to 2014 is approx. 2,200, representing 1.1% of the employment base in 2010. The largest requirements in Y&H are for labourers, floorers, wood trades and interior fit-out and decorators. For certain occupations there will be no appreciable requirement over the forecast period, partly due to the recession creating a ‘pool’ of excess labour.

Planned Construction Projects

- Joseph Rowntree Housing Trust is to set up a four year framework agreement worth up to £25 million for construction and infrastructure work throughout North and West Yorkshire. Currently 64 family houses and major infrastructure works with a value of £12million being let under the framework but more work could be added.
- Leeds City Council has invited contractors to bid for a 55 million contract to design and build Leeds City Council's proposed 12,500-seater indoor arena. Construction will take place from November 2010 to around August 2012.
- Leeds Bradford International airport has made a double announcement of a £28 million development plus a new deal to be a base for airline Ryanair. The airport will almost double in size after being given planning permission for an extra terminal and a two-storey extension for a new airside departure lounge.
- The Piece Hall in Halifax – is to be redeveloped in a £16m plan. Calderdale Council is bidding for £7m funding from the Heritage Lottery Fund and it hopes work will begin on the redevelopment in 2012.

Sources
Construction Skills Network, Construction Skills & Experian, 2008 & 2009, National Statistics, Construction News.


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