Stronger, safer, more expensive? Building safety in a UK market on the rise.

Kristoffer Hudson

Associate Director, Leeds

UK

Our UK market intelligence for summer 2021 examines the outlook for the construction industry and details how to manage and mitigate the challenges of inflation and prepare for game changing new legislation.

Construction has stepped up to play a leading role in the UK’s post-pandemic recovery, powering the economy to 2.3 percent growth in April – the fastest expansion since last summer. But rapidly rising input costs, coupled with a raft of new health and safety rules including the Fire Safety Act (FSA), Building Safety Bill (BSB) and Construction Design and Management (CDM) regulations, may add to inflationary pressures.

Economic outlook

The Bank of England now predicts that in 2021 the economy will grow at its fastest pace since the Second World War. The Bank’s forecast of 7.25 percent growth this year comes after the UK economy shrank by 9.9 percent in 2020 – its sharpest contraction in 300 years. And even if things go as predicted, the expansion of the coming months will only return the economy to its pre-COVID size by the end of 2021.

However, the construction industry is a driving force and during May 2021, the closely watched Purchasing Managers’ Index (PMI) survey recorded its biggest monthly jump in output for six and half years. As increasing client appetite and growing demand run into already strained supply chains, the bounce-back is likely to come with notable inflationary side-effects.

Legislative gamechanger

There are wider considerations for the industry, however. The Fire Safety Act 2021 – which came into force at the end of April following the Grenfell Tower fire – has already set in motion a raft of changes to secondary legislation governing the way residential properties are managed and assessed.

But greater change is on the way in the form of the Building Safety Bill and is creating higher demand for safer, compliant materials. This, coupled with the impact of Brexit on the supply chain, has pushed up the price of key materials. For example, the cost of cladding rose by 5.2 percent in the 12 months leading to April 2021 alone.

This rapidly shifting landscape in building safety is adding to the wider inflationary pressures and could drive up certain input costs sharply. In areas like safety expertise, which is facing a capacity crunch amid high demand and legislative reform, it’s vital that the construction industry must see these changes not just as an inflationary challenge to be tackled together, but also as an opportunity to drive better behaviours, raise performance standards and keep people safe.

Download the report to see the full economic data and insight, and to read about tender conditions in the UK.

For further information contact:

Kristoffer Hudson
Associate Director, Leeds

t: +44 7939048589
e: