|Construction Market Trends
The inevitable: as expected, the credit crunch has had a major impact on the UK mortgage market and consequently the construction sector. The UKs rank in the international construction growth opportunity list slipped from third in 2008 to eighth in 2009, underling the extent of market deterioration for construction in the UK.
Losers: residential activity has taken a hit due to the recession, while infrastructure construction is likely to be sustained due to public spending. The same cannot be said about commercial construction, which is suffering from tight credit and declining consumer spending.
Drivers: a major driver for growth in commercial and infrastructure construction will be the Olympic Games in London in 2012. The Olympics will generate one of the largest construction and regeneration initiatives in Europe.
Public housing: demand for residential housing in the UK is still high. By 2010, the housing shortage in the UK is expected to reach 1 million homes. Government incentives and investments of approximately 7.5 billion over two years period are expected to lead to the construction of around 112,000 affordable homes in the UK.
Construction Equipment Trends
General downturn: The downturn in residential and commercial construction has affected sales and rentals of general construction equipment. The impact on heavy construction equipment has not been as major as that for smaller equipment, as heavy construction equipment is mainly driven by infrastructure works on roads, rail, ports and other major projects.
Cranes boost: The demand for all different types of cranes has grown in the infrastructure market. There is a continuing healthy demand for crawler cranes, especially for heavy infrastructure projects.
Construction Materials Trends
Spillover: reduction in construction activity is having an adverse affect on the building material market. Lack of demand from the construction sector is driving suppliers to reduce operating costs by shutting down plants and cutting jobs.
Price fall: Average prices of construction materials in the UK went up in late 2008, primarily due to the higher prices of imports. However, by mid2009, the material prices had fallen by 5%, falling consecutively for seven months.
1.4 Construction Deals Trends