The construction industry continues to grow, with a 2.4% increase in growth year-on-year in March 2017, according to market research and analytical consultancy Leading Edge. This represented a 12th consecutive period of month-on-year growth.
New housing experienced strong growth in March, increasing month-on-month by 3.8%; month-on-year by 5.4%; and quarter-on-quarter by 0.2%.
Repair and maintenance provided the main downward pressure on construction output, shrinking both month-on-month and quarter-on-quarter by 1.8% and 0.2% respectively.
The outlook for Brexit
Uncertainty around Brexit is affecting some parts of the supply chain, with material costs rising due to poor exchange rates, and some companies concerned over the availability of labour. Despite these issues, output is on the rise, with a 0.2% increase in Q1 2017, the fifth consecutive quarter of growth.
With only small growth (aside from new housing) and Brexit causing companies to be cautious - what does this mean for marketing budgets?
· There’s been a fall in marketing budgets from 0.8% to 0.3%
· Just under half of companies are planning to increase their marketing budget
· 14% are looking to cut spending in the next year
The shrinking of marketing budgets suggests the upcoming period is going to be fiercely competitive, and companies should invest in ensuring they have a well-rounded marketing strategy in place in order to maintain or increase market share.
Creating a unique benefits-driven value offer, communicating that proposition and engaging with the buyer are key to building up protection from all the competitive pressure.
The challenge for marketing departments in the construction industry in 2017 is how to get the maximum share of the forecast growth, creating those strategies that are aligned with market needs, whilst protecting sales margins, all with shrinking marketing budgets.
The Leading Edge construction forecast is a 6 monthly report that has been published regularly since 2008 and is one of the best respected in the industry. To order a full copy, visit www.lead-edge.co.uk
Office for National Statistics: 11th May 2017