Construction is still on the rise in the region

Manchester skyline

The cranes dominating the skyline of Manchester and other towns and cities across the North West highlight the fact construction in the region is flying high.

The sector is being boosted by a high demand for new housing, infrastructure and commercial development. And it is playing a leading role in driving economic growth.

Large scale regeneration projects, city living schemes and the growing momentum of house building across the region are laying the foundations for success.

Giles Taylor, head of property and construction in the North of England at KPMG, says: “My overall sense is one of positivity and buoyancy. Property and construction are strong across the North.”

There is a strong appetite for growth, he adds. And he talks of an “alignment” of the public and private sector across the region, which is critical for successful development.

Construction companies in the region are reporting strong development pipelines and rising turnover.

GRAHAM – one of the UK’s leading contractors – opened its Northern regional office in Manchester city centre in 2013, with just three employees.

The business now directly employs more than 100 members of staff from its Salford headquarters and has gone from a turnover of £4m in its first year to £64m in 2018.

The division works across a number of regions, with high-profile projects delivered and currently on-site in Manchester, Liverpool, Chester and Lancaster –and across the Pennines in Leeds, Sheffield, York and Halifax.

Gary Hughes, regional director, said: “Northern cities such as Liverpool, Leeds and Manchester are undergoing major regeneration in both commercial and residential sectors, and we are excited to be involved in so many expansive projects with wide-reaching impacts.”

Projects in the North include recently awarded 383-bed BTR development at Strand Street on Liverpool’s waterfront and PRS schemes with developers Manchester Life and Glenbrook in Manchester city centre.

Other contractors also report healthy order books. Bardsley Construction, which is based in Tameside, increased annual turnover by 33 per cent to £68.3m in 2017, with a £72m pipeline of work.

Andrew Herring, partner at Squire Patton Boggs, says much of the growth comes from an acceleration of house building in the region, which he says: “Is doing pretty well.”

He adds: “My sense is that residential values are reflecting the positive underlying strength of the Northern economy.”

David Hodgson is regeneration group CEG’s head of strategic development in the North. Its portfolio of projects includes the redevelopment of High Street in Manchester.

He says development in Manchester city centre is being driven by residential schemes looking to deliver thousands of apartments as the city living boom continues.

Taylor agrees: “Manchester is leading the way,” he says. “There is a massive array of large scale development in the city centre. But there’s also an appetite for growth in places like Liverpool.”

However, there is caution in the air. The Federation of Master Builders (FMB) highlights rising costs for construction firms of all sizes.

Chief executive Brian Berry says: “While wages are continuing to rise because of the acute skills crisis in our sector, firms are also feeling the pinch thanks to increased material prices.

“The depreciation of sterling following the EU referendum has meant bricks and insulation in particular have become more expensive. We expect material prices to continue to squeeze the industry.”

Uncertainty over Brexit is another factor. Berry adds: “The construction sector is largely reliant on accessing EU workers with more than eight per cent of construction workers coming from the EU.

It is therefore imperative that the sector knows how, and to what extent, it can recruit these workers post-Brexit.”

Giles Taylor also strikes a note of caution, citing increasing land values and political uncertainty, both domestically and internationally, as well as interest rates heading in an upward direction gradually.
He adds: “One thing we have got to start doing better across the North is bringing people up to the level of skills that are required to take on more and more construction projects. And when we have got through that process we have got to keep them here.”

Click here to sign up to receive our new South West business news...