Analysis of government data highlights growth in the construction industry in response to high demand, but the sector will need to be flexible in the face of 2023 challenges.
New analysis reveals the resilience of the construction sector, experiencing a surge in business numbers over the last five years despite economic challenges.
The number of construction businesses in the UK has risen by 17% in the last five years β resulting in an additional 55,000 new companies in the sector. From 2021 to 2022 alone, over 15,000 new construction businesses joined the industry.
The findings were collated by Business Name Generator, using data from the Office of National Statisticsβ report on UK business activity. The analysis uncovers the industries that have shown the most growth in recent years.
Construction has experienced the third-largest growth out of all UK industries in the last five years, ahead of sectors including food services and retail.
Top 5 industries by business number surge over last five years:
1. Transport & storage β 26.42%
2. Property β 18.81%
3. Construction β 17.23%
4. Accommodation & food services β 16.56%
5. Retail β 13.95
Despite this increase in UK construction businesses, the sector is set to continue facing challenges. According to a Royal Institution of Chartered Surveyors (RICS) survey, two-thirds of construction companies highlight financial constraints as a major business obstacle.
However, construction companies are taking up work elsewhere: the RICS have reported a decline in private housing development is being offset by infrastructure-related projects.
Chloe Chai, spokesperson from Business Name Generator, says:
βThe 17% increase in the number of companies in the UK construction industry is a positive sign of growth and resilience in the face of economic challenges.
However, as we look ahead to 2023, construction businesses must remain vigilant and proactively address financial constraints to continue this upward trajectory. Itβs important for companies to seek out new opportunities and adapt to the changing market to maintain this growth and stay competitive in the industry.
Sole proprietorships comprise 56% of the UK private sector business population. Plus, construction contains the most self-employed workers of any industry. Therefore, for those looking to become a sole trader, being aware of both the advantages and risks of establishing a construction company is essential.β
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