Construction pipeline analysis released

Greater Manchester Chamber of Commerce Chief Executive, Clive Memmott

The latest Construction Pipeline Analysis – for the first time covering the whole of the North West - has been released. The report makes interesting reading as it reveals not only the size of the pipeline, but also the numbers of trained employees – across a wide variety of trades – needed to complete the projects.

The Construction Pipeline Analysis for North West 2015 has been being published by the Greater Manchester Chamber of Commerce in partnership with North West Construction Hub. The report covers construction projects in Cheshire, Cumbria, Greater Manchester, Lancashire and Merseyside.

The report shows that: 

• The planning system has a total of £114.36 billion of construction projects, with £69.78 billion expected to have a high degree of certainty of delivery.
• The output between 2015 and 2018 inclusive is expected to be £29.93 billion.
• The output is driven by infrastructure and housing at £10.88 billion and £6.84 billion respectively. Projects worth £40.36 billion are due to start in the four year period between 2015 and 2018 inclusive.
• Labour demand for 2015 is 184,064 workers, the average labour demand for 2015-2018 is 122,000 workers. This compares well with the ONS baseline off 149,000 workers needed in 2013.
• The training needs for the 2015 – 2018 period are 45% more than the average for 2011 – 2014.

Setting the report in context, Greater Manchester Chamber of Commerce Chief Executive Clive Memmott said: “Construction is a key part of our economy, whether building the homes we live in, the offices and factories where we work or the infrastructure that helps us to move between them. Since 2008, the outlook for the sector has been volatile but, along with the rest of the economy, it is now in better health. This is important as this sector is pivotal to the success of our regional economy.”

The report would not be possible without key partners and sources of data, as Clive explains: “In this report, the fourth of its type from the Chamber, we bring together a variety of data sources and, working with key partners such as Barbour ABI, CITB, the North West Construction Hub and a variety of contractors, clients and training providers, we are able to highlight in detail where the problems and opportunities lie and, with our role as the vital interface between business and education, use our experience to bring key agencies together to deliver genuine solutions quickly and directly to industry.”

He added: “This report must not be seen as an end point in itself. We will continue to champion the needs of the sector loudly on behalf of our members and will work closely with all the partners necessary to make the changes this industry needs. I look forward to working with you all to make these things happen”.

North West & South East Comparison:

For the first time, the report is able to make useful comparisons between regions. The report shows a relatively small gap between the construction pipeline of the North West and that of the South East (which Greater Manchester Chamber of Commerce also calculated in a recent report)

The construction industry contributes over £90 billion annually to the UK economy, which equates to 6.7% in value added. The value of the pipeline for the North West at £29.93 billion is only slightly less than the pipeline for the South East of the UK, which is £33 billion.

The pipeline output of £29.93bn excludes numerous high value projects planned for the North West. If these were to be included in the analysis, the pipeline value for the North West would equal the pipeline value for the South East. The North West construction activity, as a total of UK gross value added, contributed 0.63% as an average over the last 15 years with a peak of 0.71% in 2004, approximately a tenth of the total contribution of the whole of the construction industry of the UK.

Comparatively, construction in the South East has seen an average contribution of the Gross Value Added of the UK at 0.96%, approximately 15% of the total UK contributions across the 15 years with a peak of 1.046% in 2003.

On average across the 15 years evaluated, the average contributions of North West construction is approximately one-third of a percent lower than that of South East construction. In general, both made greater contributions like for like on the previous year up until the peak of 2007 with a few exceptions. Since 2007 both have seen their shares of total GVA decline due to the impact of the recession on the construction industry.