November 2012
Featured in this insight: Construction, Financial services
RSA report shows commercial construction output has rapidly declined: A report by commercial insurer Royal and Sun Alliance (RSA) and the Centre for Economics and Business Research (CEBR) has shown that the commercial construction sector has seen a sharp decline in output across all regions of the UK.
Of all of these regions, Yorkshire and Humber’s commercial construction sector has seen the sharpest fall in output.
Output values across the UK dropped by almost a third (32%) between 2007 and 2011 to £28bn, which represented a £13bn loss to UK PLC. These levels are at their lowest in ten years.
In Hull there was a 45% decline in output, which equates to a £1.8bn fall in construction activity.
These results come as a shock after positive GDP figures were released. The recession has led to a peak-to-trough loss of 42% in CRE construction output nationally.
This figure is expected to continue to fall again next year to £27bn, and is not expected to return to positive growth until 2014, when only a meagre increase of 0.3% is projected.
RSA's Paul Greensmith said: "The UK's commercial real estate sector has been hit hard by the recession, and with CRE growth so closely tied to GDP, it's not surprising we've seen such a sharp decline in output values since 2007.”
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