AMA
Research has recently published the 3rd Edition of the report
“Public Sector (Non-Residential Construction Market in the UK”,
which should be of particular interest to all construction
professionals and provides a comprehensive review of public sector
(non-residential) construction.
Between 2002 and 2007, new-build public sector construction
accounted for about a quarter of the industry’s output. In 2009,
with private sector activity sharply down, this proportion
increased to over 40% of new-build output, with
public sector funding boosting the performances of sectors such as
health and education, driven by the Government’s continuing
programmes such as Building Schools for the Future and the
Academies Programme, the Primary Capital Programme, NHS LIFT and
Procure21.
In terms of
future workload, public sector markets continue to hold up well,
particularly in education where framework agreements remain solid.
However, the picture for the second half of 2010 is less certain,
as capital expenditure is expected to fall in the medium term,
influenced by huge public sector debt.
The report
presents an overall review
of
the UK construction industry with estimated forecasts to 2014 and
gives a detailed assessment of the major sectors such as
education, healthcare, defence and law and order. We also review
current progress of government programmes within these sectors and
discuss the future of capital funding in these areas beyond 2011.
The
Government’s commitment to construction programmes within
healthcare and education has helped to underpin growth in the
market over the past few years; however, it now seems certain that
public spending will be cut after the general election in 2010 as
a result of the massive escalation in public sector debt. Whilst
frontline services such as hospitals, schools and police services
have all been safeguarded from cuts by the main political parties,
the construction industry remains concerned that any significant
cut-backs in capital spending will prolong the economic downturn
in the face of continued decline in private sector commercial
output.
The
main emphasis of this report therefore is the future impact of a
slowdown in public sector investment in 2011 as a result of the
budget deficit and how this will affect construction output. In
addition, the impending general election in 2010 will also have
significant implications for the public sector construction market
and we review in detail the outlook for the sector under a
conservative government, should they be elected.
Analysis of market developments
has been based upon both quantitative and qualitative assessments
of both primary and secondary source data. Interpretation of
relevant data has been undertaken to explore and support trends
within the public sector construction market and to provide a
basis for forecasts of future prospects.
