{"id":119674,"date":"2022-12-22T13:53:45","date_gmt":"2022-12-22T13:53:45","guid":{"rendered":"https:\/\/www.pbctoday.co.uk\/news\/?p=119674"},"modified":"2022-12-22T13:57:53","modified_gmt":"2022-12-22T13:57:53","slug":"2023-predictions-for-the-construction-industry","status":"publish","type":"post","link":"https:\/\/www.pbctoday.co.uk\/news\/planning-construction-news\/2023-predictions-for-the-construction-industry\/119674\/","title":{"rendered":"2023 predictions: what lies ahead for the construction industry?"},"content":{"rendered":"

2022 has seen three prime ministers, one infamous mini-budget, the war in Ukraine, unprecedented measures taken by the Bank of England and rocketing inflation. What are the industry predictions for 2023?<\/h2>\n

After a somewhat unpredictable year, the construction industry has looked to 2023, with a few predictions about what to look forward to in the new year.<\/p>\n

The financial impact of the mini-budget will continue to be felt<\/h3>\n

Chancellor Kwasi Kwarteng and prime minister Liz Truss debuted a mini-budget in September with \u00a345bn in unfunded tax cuts.<\/p>\n

In response, the pound tanked and the resulting economic spiral provoked an emergency intervention from the Bank of England and an unprecedented response from the International Monetary Fund.<\/p>\n

Both Kwarteng and Truss left office within weeks<\/a>. Since then, inflation continues to impact mortgage rates and has further compacted the strains of the cost of living crisis and soaring energy prices. But the outlook for 2023 may not be as pessimistic as once feared.<\/p>\n

Marc von Grundherr, director of London lettings and estate agent Benham and Reeves, commented:<\/p>\n

\u201cA further increase to interest rates<\/a> will certainly spur a continued cooling in current property values but it\u2019s extremely unlikely we will see the deep freeze that many may lead us to believe. At most, we can expect a five per cent drop during the first six months of the year, at which point stability will return and house prices will start to level out.<\/p>\n

“As for the rental market, we\u2019ve seen values climb consistently higher over the last year and with a shortage of stock continuing to be a burning issue, we can expect the cost of renting to climb by a further 10% in 2023.\u201d<\/p>\n

The housing market may stumble, but is unlikely to crash<\/h3>\n

Managing director of House Buyer Bureau, Chris Hodgkinson, commented:<\/p>\n

\u201cWhile there\u2019s no need to buckle up for a house price crash<\/a>, we can confidently expect property values to decline quite significantly<\/a> over the coming year, with a double digit decline unlikely, but certainly not out of the question.<\/p>\n

“We\u2019ve already started to see a weakening of the market due to the combined pressures of high inflation, lower wage growth, and rising interest rates putting massive pressure on household budgets<\/a>.<\/p>\n

“As a result, those entering the market to sell will still be able to find a buyer due to the shortage of stock available. But while this continued imbalance between supply and demand will allow them to sell, they will no longer hold the power where negotiations are concerned and will find the hefty premiums secured during the pandemic market boom are no longer on the table.\u201d<\/p>\n

Global circumstances -such as the war in the Ukraine- will continue to affect supply chains<\/h3>\n

Neeral Shah, founder and CEO of YardLink, made the following 2023 predictions:
\n“With businesses deeper in debt than ever before<\/a>, managing credit risk must become a top priority for those in the construction industry. The cheap-money era is seemingly over, meaning suppliers will be keeping an even closer eye on credit scores, and prioritise customers that pay within terms. Contractors will have to fall in-line or they\u2019ll risk damaging relationships, impacting the progress of projects and movement of goods<\/a> in 2023 and beyond.<\/p>\n

“Managing supply chain risks will also become increasingly important for businesses next year, as logistical bottlenecks and labour shortages rage on. Sourcing locally and digitising procurement workflows will become two key ways businesses can mitigate the impact of these risks.\u201d<\/p>\n

Others are determined to be postive in their 2023 predictions<\/h3>\n

Sean Keyes, managing director, Sutcliffe:<\/p>\n

\u201c2022 started off strong for many and there was plenty of positivity in the air, the economy recovered well post Covid and despite the complications of Brexit and a post pandemic world, spirits were high. Unfortunately things out of our control in the UK, including the war in Ukraine<\/a> brought complications and the changing political landscape also brought uncertainty, but as we always do, we kept pushing forward!<\/p>\n

\u201cI also predict that high energy prices and inflation will start to drop as we go through the new year and we can look back in 12 months time on a year that we thought would be tough, but improved and brought out the best in a lot of people and businesses. “<\/p>\n

\n<\/div>","protected":false},"excerpt":{"rendered":"

2022 has seen three prime ministers, one infamous mini-budget, the war in Ukraine, unprecedented measures taken by the Bank of England and rocketing inflation. 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