Consultant says some bright spots ahead amid hope housing has reached bottom of downturn
Arcadis has said the pipeline of new orders is down on the long-term trend with expansion this year coming solely from repair and maintenance work.
In its latest quarterly review, the firm said orders in Q3 this year were 13% down on the long-term trend with new build work contracting for three successive quarters.
It added that in nine of 11 regions in Great Britain, the trend has been for below level orders this year and in 2022.
The consultant is predicting tender price inflation of between 1% and 2% for buildings next year and between 3% and 4% for infrastructure.
Simon Rawlinson, head of strategic research and insight at Arcadis, said: “We retain our view on forecast price inflation across building and infrastructure in advance of seeing firm market-backed evidence of a recovery in future workload. However, we note an improvement in sentiment in the housebuilding sector that should result in some recovery in workload in 2024. Our central case for the period 2023 to 2025 remains low inflation, not deflation.”
In its update, the firm said: “Improved sentiment may point increasing workload in the future, but at present, the near-term procurement pipeline is weaker than it should be.
“Despite all the gloom, there are a few optimistic signs. In housebuilding, recent trading updates from some leading players hint at the market being ‘past peak pain’. Collaborative housing joint ventures are also bringing forward much needed new housing, creating the conditions where landowners and constructors can work together to improve the viability of new build development.”
No comments yet