As we approach the end of 2023, our MD Oliver West, reflects on the factors that have shaped the construction industry, the impact on Vale Southern, and what the future may hold.
There’s no denying it’s been another challenging year for the construction industry. Rising costs, materials shortages, and skills gaps have affected overall activity while making planning and management more difficult. But despite these hurdles, there are signs of recovery and new opportunities in the year ahead.
Highs and lows
The housebuilding sector has faced a particularly tough time over the past 12 months, with the volume of new builds in decline. It’s not all bad news though. According to Glenigan’s construction industry research, there is plenty of work scheduled to start in the coming year. This includes high-value private housing developments as well as build to rent schemes.
From our own experience, the lower demand for new build homes in 2023 has been balanced by the refurbishment market. We’ve been appointed for several projects involving improvements and extensions to large residential properties. This includes working with architects Mitchell Evans to enhance four homes in tandem across the south east. The work ranges from a £1m interior upgrade through to an oak-frame extension.
With research signalling a market bounce back next year, our team is in a strong position to respond. With vast experience of the residential new-build sector combined with a robust supply chain, we can mobilise quickly to deliver luxury homes of all sizes.
Industrial resilience
The industrial market is facing a brighter 2024 with a strong development pipeline. Investor confidence is growing too with more than £2bn spent in Q3. An increasing demand for new warehousing and logistics space is expected to fuel growth according to Glenigan’s research., which also reveals that new project starts are expected to rise by 17% in 2024.
Across the south coast, the industrial market has demonstrated its resilience. As highlighted by property consultancy Vail Williams, Portsmouth continues to attract demand for units across all sizes, with particular sweet spots for 2,000 - 5,000 sq ft and 10,000 - 15,000 sq ft.
This demand is resulting in the delivery of speculative space across the region. In Southampton, this includes a new development in Empress Road in the Bevois Valley area of the city. Our team is currently on site building the scheme which will span a total of 16,941 sq ft across six units and is due to complete in spring 2024.
Building futures
The education sector provides another opportunity for contractors in 2024 with government spending set to rise. Projects will include new buildings to accommodate the growing number of pupils as well as upgrades forming part of the school rebuilding programme (SRP). This will generate projects at schools and sixth-form colleges across England, with buildings prioritised according to their condition.
Following government investment, facilities for children and young people with special educational needs and disabilities (SEND) are also being developed. In Portsmouth, the city council has invested in new inclusion centres including one which has recently opened at Arundel Court Primary School. Vale Southern is proud to have constructed this new centre which will support 24 primary aged children who have difficulties with learning and cognition.
We continue to work closely with the city council to support them with new construction projects including our recent appointment to expand a special school for children aged 2-11 years who have complex learning difficulties.
Strong foundations
Looking ahead to 2024, there are many reasons to be positive. Although some of the construction hurdles we’ve experienced this year will filter into next, opportunities are expanding across sectors. At Vale Southern, our focus is on maintaining our values of family, quality and integrity, and exceeding our clients’ expectations. With a continued collaborative and flexible approach, we’re confident we can overcome any challenges and are in a strong position for whatever 2024 may bring.