The Uk Building and Construction Industry

EXECUTIVE SUMMARY

The Office of National Statistics predicts a dramatic rise in the population of the UK in the next 10 years, at a time when the UK building and construction industry is facing its toughest environment in years.

The housing market has stalled, with the country in low growth/recession, consumer confidence low as house prices are stagnant and access to capital, both for companies and homebuyers, severely curtailed post-2008.

Moreover, the demographic mix of the population is forecasted to change, with a larger proportion of the elderly.

This, together with the need to house an additional 4.9m people within 10 years, as well as develop and construct the necessary infrastructure, is a monumental challenge and opportunity for the industry.

THE UK BUILDING AND CONSTRUCTION INDUSTRY

Population Forecast

According to the Office of National Statistics, the population of the United Kingdom is currently estimated at 62.7m, and is forecasted to increase by 4.9m in the next 10 years. Furthermore, the forecasted trend is for a steady rise of 5m for each following decade out to 2081[i]:

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This rise is driven by two main factors:

1. Increasing life expectancy

2. An estimated 180,000 net immigrants annually to 2015, and 200,000 per year from 2016 onwards.

Fertility rates, which have steadily fallen since the 1930s, are expected to stabilise at 1.84 children for women born after 2010. Furthermore, whilst all sections of the population will increase in number, it is the over 80s which will increase the most, almost doubling in the next 25 years from 2.9m to 5.9m in 2035:

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Critique of the Forecast

Is it reasonable to expect immigration to continue in such fashion? The main reason to emigrate is to pursue favourable opportunities in another country. These could be economic, cultural or political. However, it seems unlikely to expect the UK to maintain a consistently high level of relative...