Strong pipeline in the UK higher education and student accommodation construction markets

Total construction output in the higher education (HE) sector was estimated to be worth around £3.9bn in 2017, and this is forecast to rise as the market for university construction work steadily increases. Despite the increase in tuition fees, student numbers continue to expand in the higher education sector placing great pressure upon university teaching, research and residential infrastructure.

Investment continues to increase among UK universities as competition to attract students intensifies, and there is a buoyant pipeline of ongoing new work at a number of universities as part of major long-term development programmes. While these projects are at varying stages of development they indicate an upward trend in construction work in the HE sector and are expected to translate into a rise in output over the medium term. As such, the HE sector remains an important driver of construction activity and output.

The expansion in the number of students has also led to increased pressure on university residential accommodation. Only around 20% of students are currently catered for in university run halls and around one third of this accommodation was built before 1979 and in need of significant upgrading.

The shortfall in university owned accommodation continues to be met by commercial providers and the purpose-built student accommodation (PBSA). The PBSA sector has seen significant growth in recent years and commercially run student accommodation now accounts for over 50% of the market by value.

The regional student accommodation market has become very mature in places such as Aberdeen, Newcastle, Sheffield, Liverpool and Glasgow, where large numbers of beds have been added in recent years and where the pipeline of developments still remains strong. In these very mature market areas, any new development has to compete on price and quality.

Development prospects are stronger in prime markets such as Birmingham, Exeter, Oxford, Bristol, Manchester, Leeds and particularly Coventry, where strong demand together with rising student numbers alongside limited supply, make these cities attractive for new student development.

London is the most undersupplied area in the student property market and recent changes to the planning regime have made such development more difficult over recent years. The provision of university-managed accommodation has not kept pace with the growth in student numbers and London remains a key investment region for student accommodation driven by growing demand by overseas and postgraduate students.

Going forward, higher education sector workloads are expected to be boosted by key long-term capital building programmes announced by universities as they seek to invest in research, teaching and accommodation facilities, compete to attract the highest paying students and prepare for the challenges that lie ahead as a result of Brexit.

“The market for purpose built student accommodation (PBSA) has emerged as a key investment sector over the past decade, with a growing interest from investors, developers and private operators” said Keith Taylor, Director of AMA Research.

“With the main PBSA operators and developers indicating a significant forward pipeline of bed-spaces, the outlook for contractors in the sector remains buoyant, with around £5.5bn worth of contracts in the student accommodation sector estimated for the construction industry between 2018 and 2022.”

However, rates of completion are expected to moderate after 2018, as the market matures in many areas and concern continues over the impact of Brexit on overseas student numbers. Rising build and site costs are also likely to continue to put pressure on developer margins and the trend for more affordable accommodation is likely to shape the forward PBSA pipeline.

The ‘Construction in the Higher Education and Student Accommodation Sector - UK 2018-2022’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Highway Maintenance Market - 5 Key Facts

• The UK highways maintenance market is valued at more than £10bn.
• Expenditure on roads infrastructure fell by almost 39% in 2016.
• In 2017, production of hot and warm mix asphalt is estimated to have reached 24m tonnes.
• Production of hot and warm mix asphalt is forecast to reach 25m tonnes by 2020.
• At present, there are thought to be between 7-8 million street lights in the UK, and over 1 million of them are over 40 years old.

These facts have been extracted from AMA Research's 'Highway Maintenance Market Report - UK 2017-2021 Analysis' available for purchase now. 

Contract Cleaning Market - 5 Key Facts

• Cleaning and hygiene services often form part of a total facilities management contract, typically comprising around 12-15% of the total contract value.
• Contract cleaning is estimated to account for around 70% of the total UK market for cleaning services in 2016.
• The commercial sector, particularly offices, remain a key end use sector in the cleaning market with a share of 43%.
• Nearly 90% of the firms competing in the industry employ less than 10 individuals.
• Market estimates indicate that contract cleaners account for the bulk of cleaning equipment sales, estimated at around 75% of the market.

These facts have been extracted from AMA Research's 'Contract Cleaning Market Report - UK 2017-2021 Analysis' available for purchase now. 

UK market for bricks, blocks and precast concrete products at highest level since 2007

The market for bricks, blocks and precast concrete products was worth over £2.1bn in 2017 and has grown by around 10% in value terms since 2015, and by almost 50% since 2012. This is the highest value achieved since just prior to the recession in 2007, and market value is forecast to exceed this in 2018. The products covered in this market are bricks, blocks, precast concrete and natural and cast stone products, with precast concrete products representing the single largest product sector.

“Growth in this market has been underpinned by recovery and rapid recent growth in the housebuilding sector in particular, as well as higher levels of output from key non-residential sectors including infrastructure, commercial offices, education and entertainment & leisure. Non-residential output remains somewhat volatile, particularly since the EU vote, which introduced a level of uncertainty affecting both business confidence and levels of investment” commented Keith Taylor, Director at AMA Research.

There are negative factors currently impacting growth in the market. Lower levels of consumer confidence and downward pressure on household incomes have impacted private RMI activity and are likely to constrain spending going forward with little signs of the squeeze on household disposable incomes being relieved. Additionally, both the bricks and blocks sectors have experienced recent supply issues as suppliers have struggled to cope with the significant rise in demand.

Demand for bricks has accelerated since the housebuilding sector returned to growth in 2014 and entered a period of sustained recovery after several years of volatility. In March and May 2017 brick sales in the UK rose to their highest levels for a decade and builders’ merchants and other distributors were reported to be replenishing stock levels after an industry-wide destocking in early 2016.

The precast concrete blocks market is also performing well, and in 2017 sales reached their highest levels in a decade in value terms following 14% growth over the period 2015-2017. One of the most important drivers of this growth has been the significant and sustained rise in housebuilding activity, with the residential sector a heavy user of a wide range of precast concrete products, including blocks. Demand is also underpinned by positive trends in non-residential construction where the main drivers for growth are the infrastructure, education and commercial office sectors.

Precast concrete structural products comprise of precast flooring, precast panels, panelised building systems and miscellaneous precast products such as structural frames and columns. Demand for precast concrete structural products has continued to rise, with the market worth 25% more in 2017 than in 2013. Output is strongly linked to the performance of sectors such as infrastructure, education, commercial offices, industrial, and entertainment & leisure – all strong users of precast concrete structural products.

Going forward, the individual product categories covered in the report are all expected to continue growing. However, the annual rates of growth are likely to be lower than those experienced 2013-16, at around 2-3%, but expected to rise more strongly 2021-22, once the Brexit-related uncertainties have been resolved and the market begins to regain some stability. Future demand will be underpinned by sustained growth in residential output, although the rate of growth, in terms of both newbuild and RMI, is expected be slower than that experienced 2013-16.

The ‘Bricks, Blocks and Precast Concrete Products Market Report – UK 2018-2022’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

UK underfloor heating market forecast to grow by 7% in 2018

The underfloor heating (UFH) market has performed well over the last few years, driven by good levels of commercial and domestic construction and RMI, and now accounts for almost 7% of the total UK heating systems sector. More recent growth can also be attributed to rising energy prices and concerns over fuel bills, and the fact that UFH is now seen as a more affordable mainstream heating option. In 2017, the market grew by 6%, with similar growth forecast for 2018.

The domestic sector accounts for almost two-thirds of the overall UFH market value, and includes new build activity by housebuilders, the self-build market and RMI / DIY retrofit projects in residential homes. Non-domestic applications account for the remainder. Although large-scale health and education projects represent the most significant non-domestic end-user markets, opportunities are arising in the care home, industrial, warehousing, leisure and entertainment, commercial office and retail sectors.

Water-based underfloor heating makes up the largest share by value, compared to electric systems. The supply structure is dominated by direct supply, with some manufacturers and other specialists offering a ‘supply and fit’ service. Elsewhere, UFH systems increasingly form a core component of the product ranges of companies such as tile manufacturers and kitchen and bathroom specialists. DIY multiples and merchants also continue to play a major role. Much of the recent growth in the market has come from online retailers, the number of which continues to expand.

Factors that influence demand for underfloor heating include housebuilding activity, which is expected to continue at a steady pace, as demand for new and affordable housing is likely to remain a major political issue. The conversion of commercial office spaces into multi-residential flats and apartments, particularly in areas of high population density, should create additional opportunities for UFH, as they are likely to be smaller in size and high-spec.

Ease of installation continues to be an important consideration within construction, given the ongoing skills shortages and a need to reduce both build time and cost. This is expected to contribute towards further growth in modular build/off-site construction, which should benefit the UFH market. Retrofit activity in both the domestic and commercial sectors are also expected to see steady growth.

In addition, the commitment towards further development of the renewable energy sector and sustainable homes should continue, irrespective of whether the Government meets its 2020 targets, and this is likely to favour adoption of UFH.  Growth will also be driven by product development focused on flexibility and maximising individual control of systems, which is likely to increase the efficiency of UFH systems further, and the increasing uptake of intelligent technology.

 “Although the market value has increased by almost 25% since 2013, there remains significant scope for growth in this sector” said Keith Taylor, Director of AMA Research.

“The level of installations remains low compared with European countries such as Germany and the Nordic nations. Penetration is forecast to continue to grow with demand driven by concerns over volatile energy bills, ongoing running costs of systems and maximising comfort, and the fact that underfloor heating is becoming a more mainstream product.”

The ‘Underfloor Heating Market Report – UK 2018-2022’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years’ experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Building Insulation Products Market - 5 Key Facts

• Mineral wool products account for 30% of the insulation products market by value. 
• It is estimated that in 2016 the domestic new build sector accounted for just under a third of the market.
• Glass wool rolls and quilts accounted for nearly 60% of the UK retrofit loft market for insulation by volume 2016.
• PIR/PUR boards are the most widely used insulation product for flat roofing, accounting for just over 60% of area installed.
• Builders' merchants and DIY multiples account for some 18-20% of the market.

These facts have been extracted from AMA Research's 'Building Insulation Products Market Report - UK 2017-2021 Analysis' available for purchase now. 

Commercial and Industrial Doors and Shutters Market - 5 Key Facts

• An upward trend in new build construction output for the private commercial and industrial sectors has resulted in 18% value growth for the commercial and industrial doors and shutters market between 2012 and 2017.
• Personnel doors have benefited from the increasing demand for automated pedestrian access doors and have seen market share increase to 59% in 2017.
• Growth rates for the industrial doors sector have been more subdued than for personnel doors in recent years, but a steady level of servicing and maintenance expenditure has helped smooth out demand levels.
• The supply structure is highly fragmented with a large number of small companies and few large key players. No single supplier dominates due to the wide and varied product mix.
• Positive but modest growth, 1-2% annual gain, is currently forecast to 2021 reflecting the slowing trend for commercial and industrial sector new orders as well as the uncertainties surrounding the Brexit process.

These facts have been extracted from AMA Research's 'Commercial and Industrial Doors and Shutters Market Report - UK 2017-2021 Analysis' available for purchase now.