In its latest construction market intelligence update for Q1 2024, local construction, property and management consultant, Rider Levett Bucknall reports that the market in Wales is currently showing signs of stable economic activity.
There is a drive for new houses and apartments, meaning residential sites and planning consents are still being secured at pace. But this does not necessarily translate into starts, as developers landbank sites due to the impact of interest rates on the sale of private units and the viability of build-to-rent schemes.
The government’s decision to cancel the northern leg of the HS2 high-speed rail project could be of benefit to the North of Wales as money is to be redirected to improve existing transportation links, while also creating new rail lines and stations. The planning process remains slow, with projects being delayed by staff resourcing issues within local authorities. Clients are still positive about bringing projects to market, but there is greater awareness that there could be long lead-in periods before projects start on site.
Commenting on the report, Jackie Pinder, Managing Partner for RLB West and Wales said: “As we move into 2024, our latest construction market intelligence shows that Wales is currently showing signs of stable economic activity. This is evident in the number of construction projects that are ongoing in Cardiff, Swansea and Newport that are continuing to perform well. It’s also been really encouraging to see net zero and EPC A goals becoming the new normal for all councils in Wales, illustrating the drive from them to lead the way forward on decarbonisation of their assets.”
TENDER PRICES AND INPUT COSTS
- Pricing levels set to track rise in cost of living.
- It is forecast that the increase in prices from current levels will be steady, unlike the drastic increases experienced in previous years. Large projects are continuing across the major cities of Wales, which will help to keep prices stable.
- MEP contractors are still extremely busy in the region but costs are levelling off.
- Timber prices are slowly reducing, while steel prices are increasing slowly.
- The labour resource remains at full capacity and wages continue to be stable.
- New data centres and laboratories are in development across the nation, with some of these projects starting on site this quarter. Investment in technology and upgrading facilities is a strong growth pipeline.
- Refurbishment and expansion projects associated with creating more school spaces is a key area of focus across the education estate in Wales.
- The energy sector in Wales is emerging slowly, with acquisitions of several large sites that are planned for solar farms and battery storage facilities.
- Residential planning consents are still being secured at pace, but not translating to starts on site as developers bide their time. Levelling-out of interest rates may improve activity but viability is still a challenge on many projects. There is continued high demand for shared ownership schemes.
Image shows: Crossrail, Cardiff
RLB and leading multi-disciplinary professional services consultancy WSP have been appointed by Cardiff Council to provide programme and cost management services to support the delivery of a new public transport system in the Welsh capital.
You can download the full report here