East Anglia: Construction in region ‘comes off critical list’

Construction in the east is showing signs of recovery, according to a report

Construction in the east is showing signs of recovery, according to a report - Credit: PA

A construction revival in East Anglia is on the cards, according a report.

Research by property firm Bidwells is pointing towards a halt and reversal in negative trends across the region over the last three years, including falling order volumes, over-capacity and rising input costs.

The Regional Building Consultancy study attributes the recovery to factors including the growing success of the Government’s Help to Buy Scheme, the new simplified National Planning Policy Framework, a resurgence of confidence and commercial activity, especially in the residential housing market, and revised forecasts for Gross Domestic Product (GDP) from 0.6% to 1.2%.

The research also shows that despite significant market variations – markets like Cambridge and Milton Keynes have remained highly active and comparatively buoyant, unlike other parts of the east and south east – activity will increase across all markets in the region.

Head of building consultancy Richard Pilsworth said: “The Government’s initiatives seem to be breathing new life into the market, especially the residential sector, and this is great news for everyone in the construction industry. The truth is that confidence breeds confidence and, as our research shows, the industry is finally being taken off the critical list.”

The report suggests a steady situation across Essex and the Thames corridor, with slight signs of a return in business confidence.

But active construction remains muted in Suffolk and Norfolk, and the office market in Ipswich this year is “extremely subdued”, with availability now standing at 567,000sq ft in the town, but take-up was the highest since 2007.

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Across Essex, availability was down by almost 20% at the end of the second quarter in 2013, while take-up increased in Chelmsford, but dropped in Basildon and Colchester, researchers found.

The most significant move was Amlin’s construction of a new 85,000sq ft headquarters in Chelmsford, but elsewhere, while several sites have planning permission, developers appear reluctant to commit.

Retail remains largely unchanged. Availability of high street and warehouse space remains at 16% and 3% respectively across the county, whilst take up was down across both sectors.

Thurrock still leads the way in industrial space, with very low vacancy rates and a modest increase in rents. Supply is likely to remain limited and as such rents could continue to edge up, the study found.