Construction costs, inflation and the industry in 2023                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    

Construction costs, inflation and recession were all extremely popular subjects that dominated 2022; the cost of construction materials rising during the course of last year.

Something we often discussed as prices changed throughout the year, we predicted that, in 2023, prices would begin to stabilise and - although the market has been turbulent, we can already see market stabilisation happening with less price increases and more product availability.

Alongside this, we expect construction inflation to rise by 5% over the course of 2023.

However, it’s important to recognise the impact rising inflation, compounded by the pressure of the ‘cost of living crisis’, is having on the construction industry, with many media outlets and industry reports released over the last few months forecasting 2023 as a ‘bleak’ and ‘dark’ year for construction.

This said, Mace Group’s Market View Report for 2023 - released earlier this month (January) - states that, despite a difficult year, construction output rose in the final quarter of 2022 by 0.6% as well as an increase in new orders of 6.4%.

Alongside this, the report affirms that, although the output of new construction works remains somewhat lower than that in 2019, these statistics are encouraging and show the resilience of the industry.

In short, the construction industry is not only resilient but also robust and - as has been demonstrated over the last few years, through lockdown restrictions and supply chain issues, impending recession and rising inflation - is capable of weathering many storms.