Construction News Round-Up - October 2024
United Kingdom & Ireland
Autumn Budget 2024: key measures for construction at a glance
The UK’s Autumn Budget 2024 provides substantial construction funding, including transport infrastructure (HS2, TransPennine upgrades), local road maintenance, and £6.7 billion for school facilities.
Healthcare receives £3.1 billion for hospital and GP upgrades, while housing benefits from £500 million for affordable homes and SME incentives. National Insurance rises, with other tax adjustments to support public finances.
Confidence in UK construction sector hits three-year high
Confidence in the UK construction sector has reached a nearly three-year high, with a Q3 2024 confidence index of 25.3, significantly above the national average of 14.4, according to the Institute of Chartered Accountants in England and Wales.
Optimism stems from increased domestic sales and anticipated demand due to lower interest rates and supportive policies.
While sales growth is projected at 6.6%, challenges include high input costs and lagging capital investment. Despite access-to-capital concerns, firms plan a slight investment increase over the coming year.
ProcurePro hits £25B in customer project value, expands to UK & Ireland
Australian procurement software ProcurePro has expanded into the UK and Ireland, following rapid growth in Australia, where it’s expected to be used by 50% of builders by 2025.
Already adopted by leading UK firms like Mount Anvil, Kori Construction and Legacie Developments, ProcurePro streamlines construction procurement, reducing delays and increasing efficiency.
CEO Alastair Blenkin noted strong UK demand for solutions to speed up project timelines, with the company poised to address the industry's growing need for enhanced procurement management.
UK construction output sees fastest growth in two-and-a-half years
UK construction output grew at its fastest rate in over two years in September, driven by civil engineering and strong demand for renewable infrastructure projects.
The S&P Global Construction PMI rose to 57.2, indicating sector expansion, with new orders and employment levels also increasing. Input costs climbed for the ninth consecutive month due to demand pressures, though supplier delivery times improved.
Optimism remains, supported by lower borrowing costs and anticipated housing growth under new government policies.
UK ministers to oversee ‘dire’ HS2 project as true cost still uncertain
UK ministers will now oversee the troubled HS2 rail project, as costs and timelines remain uncertain. The project has faced significant budget overruns and delays, sparking concerns about its future viability and the management of public funds.
Government involvement aims to address these challenges and provide clearer oversight amid increasing scrutiny. Despite attempts to control costs, the true expense of completing HS2 remains ambiguous.
September 2024 data shows decline in Ireland construction activity
Ireland's construction activity fell in September, with the BNP Paribas Real Estate construction PMI dropping to 49.0 from August’s neutral 50.0, indicating contraction.
While commercial construction declined, residential work increased due to strong demand. Input cost inflation slowed, reaching its lowest rate since January.
Despite rising costs since 2020, residential projects are buoyed by high property demand, population growth, and government support, such as the extended Help to Buy scheme.
Australia & New Zealand
Japan’s Sumitomo acquires majority stake in top Australian builder Metricon
Japanese company Sumitomo Forestry has acquired a 51% stake in Metricon, Australia's top home builder, for $115 million, expanding its footprint in the Australian housing market.
This move supports Sumitomo’s international growth strategy as Japan’s housing market declines, with plans for build-to-rent projects in Australia. Metricon will operate independently while benefiting from Sumitomo’s resources to scale housing solutions.
Victorian government announces 50 higher-density housing development zones across Melbourne
The Victorian government is planning 50 high-density housing developments in key “activity centres” mostly located along Melbourne’s Sandringham, Frankston, and Glen Waverley train lines.
This initiative aims to boost housing supply, reduce urban sprawl, and support sustainable communities with integrated residential, commercial, and community services.
Enhanced public transport access and local infrastructure improvements are also central goals, promoting self-sufficient hubs in Melbourne’s southeast.
Foreign workers not the answer to Australian construction crisis: Hutchinson Builders
Scott Hutchinson, chair of Hutchinson Builders, cautions that fast-tracking visas for foreign construction workers won’t resolve Australia’s housing crisis. He suggests that the root issue lies in excessive demand, proposing strategies to stabilise the market and train local talent.
Meanwhile, Australian Bureau of Statistics data shows a 6.1% drop in dwelling approvals in August. The Property Council advocates for government intervention, noting a 9,000 reduction in approved apartments and townhouses year-over-year and proposing legislative reforms to unlock 105,000 new apartments by 2034, including 10% affordable housing.
Call for labour shortage action following worst year for new Australia home builds
New data reveals 2023-24 as the worst year for new home builds in Australia in over a decade, with an 8.8% drop to 158,690 starts, threatening the housing supply. Apprenticeship numbers also declined, exacerbating the labour shortage.
Master Builders Australia warns of a 400,000-home shortfall by 2029 unless workforce challenges are addressed, calling for increased apprenticeships and long-term solutions to meet housing demand.
Nearly 80% increase in women learning trades in Australia
New data from the National Centre for Vocational Education Research shows an almost 80% increase in women training as apprentices in traditionally male-dominated trades since 2019.
This rise is largely attributed to the Government's initiatives, such as the Building Women’s Careers Program, aiming to expand female participation in construction, clean energy, and advanced manufacturing.
Watch: How the NZ government is moving to streamline building consents
New Zealand’s government is reforming building consents by introducing self-certification for qualified tradespeople on low-risk projects, aiming to reduce red tape and build homes faster.
Under the plan, certified builders can sign off on work without council inspection, supported by accountability measures and stronger penalties for substandard work.
NZ Prime Minister sets out plans for builders to self-certify low-risk work
The New Zealand government is proposing a self-certification scheme allowing qualified builders to sign off on low-risk residential projects without council inspections, aiming to cut red tape and speed up construction amid the housing crisis.
Building Minister Chris Penk suggests this approach could reduce delays and costs, with safeguards like robust licensing, audits, and accountability measures to maintain quality standards.
NZ Construction industry continues to slowly build growth
The New Zealand construction industry shows slow growth, with CoreLogic’s Construction Cost Index up 1.1% in Q3 after a previous decline, signalling stability after COVID-era highs.
Increased stock, tax changes, and tight credit reduce demand for new builds, despite a 34% drop in annual dwelling consents since 2022.
New debt-to-income restrictions may boost demand for new homes, while interest rate cuts and labour market improvements could drive moderate growth into 2025.
Clea Boyd-Eedle