2014 in a few words – pretty good year

This is my last blog of 2014. This time next week I will be preparing to jet off to the wintery slopes of Switzerland for a spot of skiing over the festive period. I leave the UK in a very good mood for three reasons:

·         It’s Christmas and I love the festive period;

·         Working with a business that has come along so much in such a short space of time; and

·         The market is doing a pretty good job at recovering.

Always surprises me how long data takes to collect in this digital age. The October results for construction were shared this week. Yes October! The goods news was that £6bn of contracts were awarded in October with 21% above the Midlands, so things are moving in the right direction. The Autumn Statement also provided a glimmer of hope with some large scale infrastructure projects coming down the line.

As shown below, the Yorkshire region took 5% of contracts but the south still dominates. Looking at the bigger picture, the number of construction projects within the UK in October increased by 5% on September, and is 1.9% higher than October 2013.

Now is that something to feel cheery about or not and it sort of replicates the sentiment of the industry. Having met with a number of businesses and intermediaries this week it is wide spread cheer. The order books are stabilising and growing, the bank balances (or debt balances) are looking healthy but (and it’s a big but) people are still nervous. Remember construction output in Q3-14 only increased by construction 0.8% and is still 8.2% below its 2008 level.

While the headline economic indicators continue to point to a strong outlook, there is increasing evidence of a slowdown in the Eurozone, particularly the German economy showing evidence of slowing growth. There was some evidence of a slowdown in the UK housing market but forward sales for major housebuilders remain strong. We are yet to see the impact of the recent changes to stamp duty, which can only help our housebuilding friends.

So I started feeling positive and finish feeling uneasy. The market and those within it have been burnt and it will take a lot to make us smile from ear to ear. The signs are there and we remain hopeful but this New Years the champagne will simply be a celebration with the family rather than the thoughts of a prosperous 2015.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

Enjoy the weekend, have a Merry Christmas and all the best for 2015.

Lee

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