Our Modular space team are delighted with the forecasts made in the recent Glenigan Construction Industry Forecast 2024-2025 as they back up the activity that we are experiencing in this part of the organisation.
2023 has been a very busy year for our Modular space team as they have been called upon to deploy talent at short notice on a variety of temporary and permanent contracts to support emerging requirements such as responding to the RAAC crisis in schools and hospitals as well as for longer term projects aimed at improving the sustainability and resilience of private and social housing projects and commercial buildings.
The Reinforced Autoclaved Aerated Concrete (RAAC) failures that prevented thousands of pupils from returning to school after the summer break made headlines around the world and were quickly addressed by construction companies who immediately implemented modular solutions to both provide temporary classrooms and increase the resilience of existing structures.
Not only have these new structures allowed students to return to education, but they have provided evidence of the efficacy with which modular solutions can be deployed, the flexibility offered by these solutions and the cost savings associated with them. These highly energy efficient structures can accommodate fluctuating student numbers and reduce a school's operating budget.
The Department of Education is forecasting an 18% increase in school building project starts next year, and the Government's commitment to rebuilding 500 schools over the next decade presents ample opportunity for modular construction to be deployed on a much wider scale. As of December 2023, four school projects have been completed, and work is underway at a further 170 schools.
Unsustainably high mortgage rates combined with the termination of the Help to Buy scheme caused private housing starts to stall this year, creating a slowdown in new house starts. Despite this, consumer confidence looks to be increasing as market conditions begin to stabilise, and a progressive recovery is forecasted for 2024.
It is likely that following the financial uncertainty of the past few years, house buyers will be looking for properties that offer energy security, so housebuilders would be wise to employ modular construction, both to rein in costs, increase efficiency and integrate next-gen insulation and renewable energy technologies into their new-build properties in response to the modern consumer's need for stability.
The Government's Affordable Homes Programme aims to deliver 180,000 new homes in England by 2026 and despite being well behind schedule, commitment to this scheme continues to be reiterated, prompting housebuilders to be quietly confident that growth in this area, albeit small, will come in 2024.
As with private housing, it is likely that costs will continue to be constrained and that there will be mounting demand for greater levels of energy security, so again, modular construction will present opportunities to realise efficiencies and increase build quality and timescales as pressure to achieve challenging government targets increases ahead of the next General Election.
Student accommodation starts are also forecast to increase by up to 16% next year as overseas student numbers continue to grow as the UK adjusts to its post-pandemic normal. Increasing numbers of overseas students requires targeted investment in purpose-built student accommodation where, again, modular construction can provide the agility and flexibility that is required to adapt to changing demands.
The Glenigan industrial forecast was covered in detail in a previous blog post, but it is likely that modular construction will be employed in this area as hybrid working requires innovative solutions to accommodating office-based personnel in energy efficient structures that also deliver well-being outcomes.
The October 2021 Spending Review committed £32.2Bn of funding to the Department of Health over the three years to end in FY24/25 which included plans to upgrade more than 70 hospitals by the end of the decade. This is in addition to the previously announced programme of opening 45 new hospitals in the country.
Progress in this area has to date been exceptionally slow as priority is rightly committed to patient care rather than infrastructure work, however, the emergence of RAAC problems within five hospitals is likely to prompt renewed attention to retrofits, upgrades and hospital replacement projects next year.
Investing in the NHS will be a political priority for all parties, so an 11% rise in project starts is anticipated next year. Targeted use of modular structures and technologies could deliver immediate benefits in terms of increased usable space, improved energy efficiency, access to more modern infrastructure and reduced operating costs.
In conclusion, modular construction has experienced a boom this year and does not look likely to slow down as we enter 2024. Indeed, we anticipate that our Modular space team will be stretched to capacity next year, and they are eagerly awaiting the challenge.