Glenigan's 2024 industry forecasts hit our inboxes recently and have created quite a buzz here at Build Space. In this post, we discuss some of the findings from the Glenigan report and our senior consultant from the Open Space team, Scott Mulgrew, shares his views on the industrial and logistics market and his predictions for what the coming year is likely to hold for the construction industry and its resourcing needs.
Glenigan 2024 industry forecast for industrial and logistics projects
Weak economic growth and high interest rates continued to disrupt many construction projects over the course of 2023, with the cancellation of phase 2 of HS2 exacerbating these delays and disruption as resources were reallocated towards other infrastructure projects.
An area in which growth was realised was within the industrial and logistics sector, as consumer shopping habits continue to drive online retailers to invest in logistics facilities and warehouses to support their increased workload.
With many projects already in the pipeline for delivery in 2024, this looks to be a buoyant area in which private sector investors can confidently stake a claim. It is anticipated that online retailers will continue to require further warehousing and light industrial space, which will maintain growth in this sector over the coming year.
Elsewhere, the need for businesses to adapt to post-COVID working practices continues, with many offices being refurbished with an enhanced focus on occupant wellbeing and environmental sustainability. These refit projects are continuing to attract attention as innovative technologies and designs are implemented, including the use of BIMS and renewable energy sources to provide resilience against fluctuating energy prices and deliver sufficient flexibility to adapt working environments to suit the needs of their occupants.
New build office projects have created a stir this year, with many notable designs achieving sustainability commendations and being delivered within a challenging economic environment within their stated time, cost and quality parameters. Success such as this bodes well for the construction industry as a whole, although depressed confidence levels within the manufacturing sector are disappointing, as slow growth and high borrowing costs continue to discourage manufacturers from investing in new facilities and premises.
Build Space feedback and thoughts
2023 has certainly been a year of two halves, which is indicative of the market and aligns well with the recap and forecast provided by Glenigan. At the start of the year, we were highly attuned to financial uncertainties within the market as the majority of our clients sought temporary hiring solutions to address shortfalls within their workforces.
As the market began to gain traction towards the middle of the year, with an increased number of project starts in the pipeline and successful deliveries being achieved, this was reflected in greater client confidence as permanent recruitment overtook freelance hiring.
We, like our clients, continue to monitor the state of the market and are well aware of the potential fluctuations and uncertainties, in particular relating to the political landscape and the uncertainties associated with the next General Election. However, with a continued need to deliver Net Zero targets, we are reasonably confident that private and public sector investment will continue over the course of the next 12 months, providing stability for industrial and logistics projects and allowing the achievement of successful new build and retrofit office, warehouse and hybrid workspaces.
We would be delighted to see interest rates begin to settle back to more reasonable levels, which will increase rental yields and thus investor confidence, enabling construction firms to progress further new build and retrofit projects that will continue to enhance the operating environment, satisfy consumer demand and increase profitability.
Looking for work or workers?
As we anticipate the market growing through 2024, we welcome expressions of interest from both construction forms seeking to increase the size of their workforce or to hire talent with particular skills to bolster their teams, as well as from individuals who are ready to make a change and take their career in a new and exciting direction.
At Build Space, we are proud to work with some of the UK's most influential construction companies and regularly provide specialist talent into these firms to help them deliver their objectives and achieve their targets. We look forward to continuing our engagement with all of our Open Space clients through 2024 and beyond.