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Sharp rise in number of new construction businesses

Figures show that overall there was a net gain of 5,445 construction businesses in 2013*, as more new firms opened than closed down for the first time in five years. This compares to a net loss of 7,030 construction firms the year before.

In total, 38,335 new construction firms opened in the year to December 31st 2013, 31% more than the previous year when 29,295 were set up.

Graham Jenner, Director at NoPalaver, says: “These figures suggest that the construction industry has finally reached a tipping point in its fortunes, with the number of new businesses being created on the up and the number closing their doors going down.”

“Housebuilding has really picked up pace as the market has recovered. Demand for new homes is continuing to outstrip supply, moves to make the planning system more favourable are starting to have an impact and initiatives such as Help to Buy have boosted homeowners’ buying power.”

“At the same time, commercial property has also rebounded, as more businesses now decide the time is right to upgrade or expand their premises and developers press the green light on shelved projects or see more new opportunities coming on stream.”

“Infrastructure projects are also playing a part. After years of underinvestment, there appears to be renewed focus on areas such as transport and utilities. While budgets remain extremely tight, high profile projects such as Crossrail and plans for more high speed rail links are boosting confidence in the sector.”

He adds, “This is good news for contractors. As the construction industry gains momentum, their specialist skills and breadth of experience are likely to be in increasing demand.”

“New construction businesses especially want to have as much flexibility as possible in terms of capacity while keeping headcount to a minimum as they establish themselves, so using contractors is likely to be a good solution for many.”

*Year end December 31st, latest data available.


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