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Rising Construction Costs Pose Challenges for UK Projects in 2024

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Rising Construction Costs Pose Challenges for UK Projects in 2024

Rising Construction Costs Pose Challenges for UK Projects in 2024
February 21
09:20 2024

Construction expenses in the UK are expected to rise by 3–3.8% in the current year, following a 4.1% surge in 2023, as projected by a recent report from Currie & Brown. This forecast poses challenges for construction firms, urging them to innovate processes and capabilities to manage costs effectively and keep projects on track. The report emphasizes the potential ramifications for strategic initiatives like the National Infrastructure and Construction Pipeline in the UK, with an additional £1.56 billion possibly added to the £82 billion earmarked for 2024.

To address these challenges, the report recommends actions in key areas. First, it advocates for the adoption of innovative practices, such as modular construction, to mitigate the impact of local skills and material shortages. Second, it underscores the importance of integrating sustainability considerations at every project stage to reduce future investments and enhance operational efficiencies. Lastly, it advises the construction industry to embrace digital transformation, leveraging technologies like AI and advanced data analytics to enhance project ROI and proactively manage challenges.

Nick Gray, Chief Operating Officer of Currie & Brown, acknowledges the long-term trend of rising construction costs, urging the industry to collaborate with clients to address this challenge. While the UK is not alone in facing escalating construction costs, the report predicts increases across all operating regions, citing common drivers such as geopolitical turmoil, inflation, sustainability rules, and persistent skills and materials shortages. Grey highlights challenges for the construction industry in 2024, including a shortage of skilled labour, expensive materials, sustainability compliance, and sluggish productivity. However, he stresses that collaboration, innovative practices, and technology optimization will be crucial to mitigating cost increases and ensuring the successful delivery of key projects within budget.

Source: Property Reporter

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