THE construction industry is a bedrock of the UK’s economy and has been since the advent of the industrial revolution. Construction represents a large portion of the country’s GDP, having added over £122 billion in value to the UK’s economy in 2022.
But construction is an ill-understood industry by the general public, who see large industry names and sprawling building sites in domestic and urban locations alike. What do these mammoth companies contribute to the economy, beyond the simple provision of property?
Subscribe to our daily newsletter
Why? Free to subscribe, no paywall, daily business news digest.
High-Value Spaces
Before we further examine the instrumental impact construction has on the UK, it is important to understand the value behind property on a national and global level. Land is more of a commodity than ever before, with large sums attributed to even undeveloped tracts in desirable areas.
Construction companies are uniquely placed to make the most of this land, having the skills, equipment and financing necessary to produce high-demand property on said land. With regard to domestic properties alone, demand is much higher than supply – a fact that was in large part responsible for the drastic rise in property values during the coronavirus pandemic.
With developed spaces in such high demand, construction businesses are consequently in high demand for the development of such spaces. Technological and architectural innovations have also gone hand-in-hand to improve value for clients and consumers, especially in recent years.
Profit is all-but guaranteed for investors in property developments, whether domestic or retail – guaranteeing the gainful employment of construction companies in the long term and affirming their place as a central earner for the country’s economy as a whole.
Wider Industry Impact
The construction industry is also responsible for the continued viability of other industries, being a key driver for demand in wholesale supply of raw materials. Even smaller-scale domestic new-build constructions rely heavily on reliable supplies of timber, propping up local economies and smaller-scale wholesalers.
On a larger scale, big infrastructure projects continue to justify the existence of national institutions such as British Steel, which has endured as a provider of UK jobs despite multiple international acquisitions. As such, the construction industry is a lynchpin for job security on a much wider basis than the provision of jobs to contractors.
Socio-Economic Benefits to Construction
But the direct positive impacts of the construction industry cannot be ignored. On a hyperlocal basis, construction projects ensure the gainful employment of skilled tradespeople in local communities, injecting urban and rural areas alike with financial stimulus and ensuring the health of said communities. It also creates a strong supply chain across manufacturing businesses to wholesalers and end users. And it doesn’t stop there as homes need maintenance and often times present opportunities for improvements or refurbishments, which in turn creates even more business and employment opportunities.
The end results of construction projects also have positive impacts, felt keenly by local populations. The provision of low-cost, sustainable housing helps to build local populations, while preserving unique character. In urban areas, continued development alleviates housing pressures, and brings new business in for the betterment of urban community.
