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UK market view: Q4 2023

19 December 2023

2024 to be another year of weak economic growth

Key takeaways

Mace reports stagnant GDP growth and forecasts a challenging 2024 for the construction industry

Private housing output fell by 13.4% from Q3 2022, impacting overall construction performance

Rising insolvencies and wage pressures continue to affect the availability of subcontractors

UK market view: Q4 2023

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The first nine months of the year show construction growing at around twice the rate of the wider economy. Whereas GDP is 0.5% larger than it was in the final quarter of last year, construction output has risen by 1%.

This, despite the problems in the housing market, is a definite success, but low economic growth looks set to continue into next year, and possibly beyond. Probably the most negative of forecasts come from the Bank of England, which is forecasting GDP will finish no higher in 2024 than it ends 2023. It also expects growth of just 0.2% in 2025.

This is much lower than consensus forecasts, which have GDP going up 0.4% next year and 1.4% in 2025, as well as those from the Office for Budget Responsibility (OBR). However, even these growth rates are less than ideal, and show the economy will continue to struggle going forward. For construction, as well as another year of falling housing investment, the OBR is forecasting declining business investment.

Download our Q4 market view to find out more.