The UK economy continued to remain resilient in 2016, notwithstanding the volatility that immediately followed the Brexit referendum. GDP increased by 1.8 percent, which represented a comparatively strong performance compared to the eurozone.
The government’s investment in infrastructure projects is a definite boost to major regional centres, with activity visibly higher in the high-speed rail corridor, particularly in Birmingham. The green light on the Hinkley Point C nuclear power station is spurring growth in the South West.
The devaluation of sterling has made the regions more attractive to foreign investment, with Manchester arguably the most attractive area outside of London. Manchester is experiencing increased planning applications, an unprecedented number of high-rise schemes and a significant rise in the number of residential schemes. Scotland and Northern Ireland, however, remain flat compared to other regions, being over-reliant on public sector works and government expenditure.
Activity levels are expected to remain steady and the industry will need to finely balance the rising cost of inputs and competitive pricing to ensure slim margins are maintained at levels that keep projects viable and companies profitable.
Prices are still expected to rise over the coming year, however, as large-scale infrastructure projects act as a significant draw on skills capacity leading to further burden on labour rates.