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The total estimated level of contractors output in
the entertainment sector as a whole was around £4.3 billion in 2007,
with the pub sector accounting for around 18% and the hotel sector
around 23%. In the same year, leisure construction accounted for
around 6% of total new work obtained by contractors in the UK and
around 9% of all commercial new work obtained by contractors. The
immediate outlook for entertainment construction is unsettled with a
slowdown in output expected in 2008 of 2-3% due to lower levels of
consumer confidence and spending.
Recent market growth in entertainment construction
output has been driven by continued growth in the tourism sector,
especially in London and the major business and conference
destinations such as Birmingham, Manchester and Leeds and cultural
and leisure destinations such as, Bath, Cardiff and Edinburgh.
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Revenue
from the UK tourism and entertainment industry passed £120 billion for the
first time in 2006 and was estimated to be worth around £120.5 billion,
around £20 billion more than in 2005, with further growth in 2007. The
largest sector within the UK leisure industry in terms of revenue is the
gambling and betting activities sector (including revenues from casinos),
with revenues reaching approximately £50 billion, followed by ‘out of
home’ drinking in pubs, clubs and bars, valued at around £21 billion and
the restaurant & café sector valued at £20.2 billion.
AMA Research estimates that
capital expenditure going forward among the Entertainment sector’s leading
companies will be over £1,800 million. Those sectors that are expected to
benefit from improved construction output, within the entertainment
industry include the gaming and casino sector, driven by legislation
allowing for 17 new casinos from 2007, mid-market restaurants and
mixed-use leisure schemes in town and city centres.
Looking further ahead, the
2012 London Olympics are expected to give UK tourism a massive boost both
in the run up to the Games and also in the years that follow, due to the
‘Legacy’ phase which will see the development of improved sporting,
leisure and community facilities. Furthermore, a substantial amount of
capital expenditure is expected to be invested in the serviced
accommodation and hospitality sector in order to bring hotels and
facilities up to the international standard expected by incoming tourists.
The main
challenges facing the leisure industry and leisure construction over the
next few years will continue due to stagnant house prices, rising energy
costs, the strength of the Pound against the US Dollar, the difficulty
with raising finance for large projects; and the deteriorating performance
of the UK economy. The UK’s economic performance will have a direct impact
on the willingness of consumers to spend money on leisure pursuits, which
in turn will impact upon the contractors output in the sector.
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