Housebuilding to kickstart wider industry growth next year, PwC forecasts

PwC is forecasting growth of nearly 3% next year with the uptick being driven by annual housing targets and growth in repair, maintenance and improvement work.

The firm said overall spend this year will actually contract by 2.1% before next year’s return to the black.

In its latest Construction and Housebuilding Outlook, the financial services firm said the new build residential sector would grow by 7% next year.

It added that RMI work “demonstrated greater resilience during challenging periods” but private housebuilding, commercial and industrial work had all been hit by high interest rates and flaky consumer and investor confidence.

But it said there was a more positive outlook for private housebuilding especially “given the government’s renewed housing targets, inflation seeing some respite and an improved interest rate environment”.

And Sam Edwards, director, Industrials and Services at PwC UK said it could be forced to revise upwards its growth figure if the new Labour government’s building plans go more quickly than expected.

He said: “We cautiously expect some potential upside to our forecast from the Labour government’s newly announced house building targets, which if achieved, could result in a significant activity uptick.”

Meanwhile, a new survey from Southern Construction Framework, which covers mainly public sector work in the south of England, said that build costs for the M&E sector is continuing to increase, with the industry experiencing a 7% rise in costs for the second quarter compared to the previous year.

Average build costs were up 3.8% on the same period last year with other trades seeing large increases including brickwork (6.32%) and roofing and cladding (6.2%).