UK market view: Q3 2023
Construction continues to grow amidst considerable headwinds
Key takeaways
Mace maintains its 2023 tender price forecast at 3.0% for London and 3.5% for the rest of the UK
Construction output increased by 0.3% in Q2 2023, driven by repairs and maintenance
The industry faces challenges from high inflation, interest rates, and political uncertainty
The last three months have seen the economy continue to (just about) grow. GDP rose 0.2% in the second quarter, with construction output rising 0.3%. It is hard to describe such performance as anything better than modest, and it appears doubtful that conditions will pick-up anytime soon.
While pay is now growing faster than inflation, real incomes are lower than they were at the end of 2021. With interest rates continuing to rise, and a growing number of households remortgaging at higher rates, pressures on spending remain problematic.
None of this is surprising, and nothing has noticeably improved or worsened since our previous report. As a result, and against such a backdrop, we are leaving our tender price forecasts unchanged.
This is not to say that we are complacent about the challenges facing construction. Download our Q3 market view to find out more.
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