News
New OGC report: Construction Demand Capacity 2005-2015 study
Released on 26/07/2006
The Office of Government Commerce (OGC) has published a new report on construction demand and capacity from 2005 to 2015.
The report, undertaken by Deloitte, was to examine the UK construction industry's capacity to deliver the public sector's built environment programmes between 2005 and 2015. This includes the infrastructure for the 2012 Olympics to time, budget and the required quality.
The study was also to consider the likely effect of programmes on each other, the construction industry and the UK economy.
A major deliverable feature of the study is an econometric model, able to undertake scenario modelling, to inform the public sector's construction investment decisions.
The study is a follow-up from OGC's 2003 Kelly Report, which identified how the public sector could help to influence and enhance the UK construction industry's long term capacity planning, so as to meet public sector demand and provide a healthy level of competition.
OGC with the Public Sector Construction Clients Forum (PSCCF) are now considering the implications of the report's findings and how its recommendations may be taken forward.
PSCCF acknowledged the great potential of the econometric model for market analysis and planning purposes - provided that public sector procurers can provide granular input information.
The report's key findings include:
- While the UK construction industry is not expected to face significant general labour capacity constraints to 2015, there is an assumption that use of migrant labour will be unrestrictive.
- Significant specific skills shortages are identified in project management. Design disciplines such as M&E and civil engineering, bidding capacity and client-side leadership capacity.
- Industry-wide new work inflation for 2005-2015 is expected to be about one percentage point above underlying inflation (three per cent per annum compared with two per cent per annum for economy-wide inflation).
- Olympics construction expenditure expected to add on average 0.12 per cent per annum to output price inflation and 0.2 per cent per annum to tender price inflation in London between 2006 and 2010; inflation premium will peak at 0.6 per cent during 2006/2007.
- Energy and steel cost fluctuations may further impact output prices.
The full 2005-2015 Construction Demand/Capacity Study is available here. (PDF, 1.85 megabytes)
Contact details:
OGC Service Desk
Tel: 0845 000 4999
E-mail: ServiceDesk@ogc.gsi.gov.uk
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Page last updated: 2008-10-20
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