NIPS

INDUSTRY OVERVIEW

The industry is in a mature stage of its life cycle, with growth determined by long-term demographic factors, 

mortgage approval rates and general confidence in the economy. Over the 10 years through 2018-19, the 

value the industry adds to the economy is projected to increase at a compound annual rate of 2.5% while 

the UK GDP is forecast to grow at a compound annual rate of 1.3% over the same period. However, the 

stronger performance is mainly due to a bounce-back in performance over the next five years as the 

industry recovers from its deep recessionary trough.

THE MARKET

The total industry revenue in 2013 was an estimated £43bn, with residential construction industry 

experiencing the greatest future growth potential. Within the industry, the barriers to entry for individual 

contractors are relatively small, creating a highly competitive environment that grants consumers power. 

There are few substitutes to hiring a residential construction contractor, particularly for highly skilled work, 

but the competitive environment makes contractors seek out all mediums for leads.

Resedential Construction

Commercial Construction

Civil engineering Activity

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Jan-04

Jan-05Jan-06Jan-07Jan-08Jan-09Jan-10Jan-11Jan-12Jan-13

PMI,  Seasonally Adjusted, 50.0 = no-change

UK Construction PMI by Category of Activity

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