Overview

The UK, the sixth largest global construction market outside the United States, is of strong interest to U.S. exporters. U.S. building products enjoy a strong reputation for quality and reliability in the UK, while import tariffs and regulatory requirements pose challenges.

The UK construction industry growth of 1.8 percent in 2017 was the slowest since 2012 and output had fallen in Q4 of 2018 to its lowest point, with uncertainty surrounding Brexit blamed for the decline. The forecast for the construction industry is a small growth by 0.6% in 2019. 

Best performing sub-sectors are private housebuilding (2% forecast growth for 2019) and infrastructure (8.7%).  However, these forecasts assume that the UK and the EU will agree a deal on Brexit.

The Government continues to support large infrastructure projects.  In the 2018 Budget Government committed an extra $635 million of funding to the Housing Infrastructure Fund.  The pipeline of infrastructure megaprojects with over $640 billion of planned public and private investment promises recovery for the sector in 2019-2022. 

The UK has close proximity to European producers of high-quality products, as well as access to global suppliers of competitively priced building products.  U.S. suppliers must overcome transport costs and deliver on product performance and post-sales service requirements to compete in the UK.  To win sales may also require regular direct engagement with buyers to distinguish specific product performance vs. competitors and highlight a product’s “green” performance attributes, in areas such as energy and water savings and indoor air quality improvement.


Leading Sub-Sectors

The best prospects are innovative green products and smart technologies alongside disruptive technologies for digital construction.
U.S. architectural and engineering firms are well received in the UK. The UK is one of the largest markets for the U.S. Architectural and Engineering Services, although it should be noted that the competition in this market is very high.
Specifically, the U.S. is one of the top sources of the UK’s imports for the sustainable building products (including heating, ventilation, air conditioning and refrigeration (HVACR), lighting, plumbing, insulation, wood, doors and windows, and glass). The specific sub-sectors with good prospects are fall under the following categories:

• Heating Ventilation Air Conditioning and Refrigeration (HVACR) - U.S. HVACR products are highly competitive in the UK, holding the second largest share of the import market after products from Germany.

• Insulation - U.S. insulation products are strongly competitive in the UK, claiming a 20.4 percent share of this subsector’s import market.  As a source of imported insulation products, the U.S. ranks second only after Germany, which holds only a slightly larger share of the import market at 20.9 percent.

• Lighting - In the lighting subsector, opportunities may exist in niche products and those at the cutting edge of green attributes.  This relates to the emergent recognition of the non-visual effects of light, in terms of different spectrums and intensities of light impacting well-being, productivity, and overall comfort.  There may be stronger opportunities for export of a wide range of higher-technology lighting products in schools, healthcare facilities, elder care facilities, offices, and sports facilities.

Opportunities
 

Green building has a well-established history in the UK, and is embraced by both the public and private sectors.  The voluntary Building Research Establishment Environmental Assessment Method (BREEAM) system for rating the sustainability of non-residential building designs arose two decades ago, and a mandatory Code for Sustainable Homes was introduced in 2006. In 2015 the Government in England has withdrawn it consolidating some standards into Building Regulations. BREEAM remains as a voluntary scheme. The majority of local planning authorities require that new buildings in the UK are certified and achieve high BREEAM ratings.

Specific initiatives within the policy environment surrounding green building continue to evolve.  In 2015, the new UK Government eliminated the Green Deal policy, as it had failed to deliver its objectives, along with the Zero Carbon Homes policy to reduce net regulations on housebuilders.  Still, the current Home Energy Efficiency Scheme stays rigorous and requires high green standards from building products. The Government heavily supports building of new homes in 2018 and 2019, which is hoped to increase UK construction activity.

In support of intelligent buildings, smart meters are being rolled out as standard across the country. The UK Government is also working to advance building performance from a perspective of resilience.  By 2021, the UK Government has pledged to spend £2.3 billion for over 1,500 flood defense schemes across the country.

Significant projects currently under way or in planning stages are: Heathrow Airport Expansion ($22bn), High Speed Rail 2 (HS2) ($70bn), Thames Tideway Tunnel ($2.3bn) and Crossrail 2 ($30bn).

The best prospects for infrastructure projects of this scale are for innovative and low carbon products and solutions alongside digital technologies.

Web Resources

Construction Products Association  
Construction Industry Council                              
Association for Consultancy and Engineering                      
Office for National Statistics                                                     
UK Construction Week                                                              
Homebuilding and Renovating Show
Royal Institute of Chartered Surveyors
Building Magazine 
Ecobuild

For further information, please contact:
 

Sara Jones
Commercial Specialist
U.S. Commercial Service
Tel: +44 20 7891 3451
Email: sara.jones@trade.gov