UK market view: Q1 2024
Recession may be shallow, but steep fall in new orders is a concern
Key takeaways
Mace warns against aggressively discounted bid prices as material costs and labour costs dip
The construction sector's growth is buoyed by the repair and maintenance sector, despite a weak economy
Supply chains remain fragile, and ultra-low bid prices could lead to further business closure
2023 finished with the UK in a recession. It may be a very shallow one, but there have now been two successive quarters of negative growth, and this has left the economy just 0.1% larger than it was in 2022.
Overall, last year wasn’t too bad for construction, its annual growth of 2% was notably stronger than both services and production, which fell. However, the industry’s strength came from the repair and maintenance sector, and all new work shrank 2.1%.
This reduction was mainly due to falling output in the residential sector, and the more concerning aspect for the wider industry is the lack of new orders. Declining over 20% last year, it points to not enough new work coming through and a very difficult year ahead.
Read our Q1 market view for more analysis.
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