Another resilient year for construction

As we approach the end of the year, Neon Mavromatis, Managing Director, Construction, reflects on the construction sector’s performance during 2022.  

Despite many challenges throughout the year, the construction industry has shown remarkable resilience and continued to grow in certain sectors. Data provided by the Office for National Statistics (ONS) showed that construction output for September 2022 was the highest since records began at £15.125m, led by an 11.3 per cent rise in repair and maintenance work in public housing. This growth has been achieved against record highs in materials and energy costs, economic and political change and new building regulations from The Building Safety Act.   

Government support for the construction sector 

The new Chancellor’s Autumn Statement promised some encouraging measures to build consumer and investor confidence in the sector going into the new year. Further support to help manage the energy costs, investment in infrastructure and more than £6 billion (from 2025) to extend energy efficiency retrofit programmes were announced. The retrofit programme is designed to reduce the energy use of buildings by 15 per cent by 2030, with a new Energy Efficiency Taskforce to support this. The Chancellor also confirmed his support for the construction of a new nuclear power station at Sizewell C in Suffolk and committed to protecting expenditure on capital projects for the coming two years, including HS2, East West Rail, and the New Hospital Programme. 

Protection in a turbulent economic market  

While construction output has risen slightly the strong likelihood of a 2023 recession and ongoing price increases are a concern for the sector. ONS data shows price increases of 10.1 per cent up to September 2022.   

Bonds have been in high demand as businesses face increased scrutiny regarding their ability to deliver contractual obligations. Economic uncertainty drives demand for bonds as employers are increasingly making them a contractual requirement.  

Looking forward 

The challenges of the last few years presented by Covid 19 have shown how well the construction sector copes with uncertainty. However, putting measures in place to protect cash flow and payment or debt issues will remain a priority for many businesses in the new year. Working closely with an experienced construction insurance broker to arrange the appropriate protection and cover limits for your business can help mitigate some financial risks. . If you would like us to review your insurance cover, or if you have any questions about how you can manage your risk more effectively, please get in touch with our construction experts. We would be delighted to assist. 

We want to take this opportunity to wish you all a very Merry Christmas, and all the very best in the new year. 

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