Happy New Year

As we start a new year, Neon Mavromatis, Managing Director, Construction, looks at what’s on the horizon for the construction sector in 2023.

Despite consistently tough conditions, latest figures show the level of construction output remains 3.1% (£452m) above the February 2020 pre-coronavirus (COVID-19) pandemic levels. In the three months to November 2022, construction output saw an increase of 0.3% (£140m) which was solely due to new work. This is the first increase in the three-month on three-month series since July 2022 (0.5%).

Sector forecast

While growth in residential and commercial areas is forecast to slow sharply during 2023, construction insight specialists Glenigan predict growth in other areas. Changes like office refurbishment projects to accommodate post-pandemic working practices and increased investment in logistics facilities due to increased online shopping are cited as growth areas. They also expect to see a boost to major civil engineering projects as the Government prioritises infrastructure and energy investment.

Legislation – what to expect in 2023

The Building Safety Act created a new regulatory regime, and a new Building Safety Regulator (BSR) will sit within the Health & Safety Executive. The regulator will approve higher-risk residential projects over 18m at the planning application stage and the initial building control stage. Project designs need to be submitted to the new regulator at ‘gateway’ points, and the regulator will have the power to freeze projects if safety is compromised.

It also regulates high risk buildings (HRB) throughout their lifespan to ensure they’re fit for purpose and improve accountability, risk management, and safety assurance to those buildings.

The construction industry can expect to see the following come into force:

• Creating a Building Advisory Committee that will advise the Building Safety Regulator (BSR) on developing future building regulations.
• Establishing an Industry Competence Committee to publish public guidance on industry competence and advise the Building Safety Regulator on this issue.
• Mandatory registration of building inspectors and building control approvers.
• Mandatory registration of occupied high-risk residential buildings.
• New duties on the ‘Accountable Person’ to manage safety risks in higher-risk buildings.
• Gateways two and three are to come into operation.
• Mandatory reporting of fire and structural safety issues.
• S147 to S155 of the Act creates the right to sue construction product manufacturers and suppliers for breach of Construction Products Regulations if it causes a building to become unfit for habitation.

The impact of this secondary legislation should be increased safety and less risk, which is always a priority for all parties involved in the construction process. The Government plans to roll out secondary legislation from The Building Safety Act over the next 6 to 12 months, and detailed plans are on the Government’s website.

Construction projects

Construction News highlighted the following major construction projects scheduled this year:

• Plans to revamp London’s Liverpool Street station are due to be unveiled in 2023 by Sellar, the developer behind The Shard.
• Redevelopment of Marks & Spencer’s flagship Oxford Street store is ongoing, and ministers are due to settle the project’s fate in 2023.
• The outcome of the new hospitals programme should be settled this year, including the Royal Cornwall Hospital, a rebuild of the Watford General Hospital, and refurbished facilities at Hemel Hempstead and St Albans. All were approved by the relevant trusts in June, despite costs doubling since the projects were proposed.
• The leisure sector is to get a boost as Aston Villa and several other Premier League clubs seek to expand their stadiums, including Liverpool, Everton, Nottingham Forest and Crystal Palace.
• Work on the HS2 tunnel will continue this year

Protection against the unexpected

Putting measures in place to protect cash flow and payment or debt issues will remain a priority for many businesses in the new year. If you have any questions about how you can manage your risk more effectively, we would be delighted to assist.

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