Construction Intelligence Report: East Anglia

Kingsley Thomas
East Anglia continues to enjoy a buoyant economy in its principal population centres of Cambridge, Peterborough, Ipswich, Bury St Edmunds and Norwich with no suggestion of a slowdown in the foreseeable future.

The City of Cambridge has developed an extraordinary ability to attract world class organisations looking to benefit from the singular relationship that exists between business and the University.

The only threats to growth are the needs for more housing and better infrastructure whilst the biggest challenge facing the construction sector appears to be the skills shortage which is already impacting on tender prices.

East Anglia summary

Local Economic Outlook

Whilst nationally we are now hearing reports of a possible economic slowdown, Cambridge continues to be a hotspot for investment attracting multi-nationals particularly from the pharmaceutical and technology sectors, and this in turn is fuelling the need for more housing both in and around the city and nearby towns. Worryingly, recently published research also indicates that in October 2015 employers in Cambridge had just 0.09 applicants per job vacancy.

Schools, Colleges and Universities News

In addition to the North West Cambridge Development, the University of Cambridge continues to invest over £100million (m) a year in both new and existing buildings through its Estates Development department. Other recent projects have included the £26m Maxwell Building on the West Cambridge site creating new facilities for research scientists from industry to work alongside university research groups to facilitate a two-way flow of ideas. Also on the West Cambridge site there is the planned £150m Cavendish Laboratory for the Department of Physics, due to complete in 2020. The University’s campaign to raise £2 billion to help shape all our futures is off to a great start through a gift of £35m from the estate of Ray Dolby to Pembroke College and a £10m grant from the Leverhulme Trust to fund a new research centre.

Cambridgeshire County Council will be having to make some difficult decisions as it tries to make a further £41m in savings, and more than £100m over the next five years. The Council has already made £218m of savings since 2009 and this is certainly going to result in cuts to the capital education programme. However, on a brighter note, construction is soon going to begin on a new, £36m secondary, primary, special schools and pre-school in Littleport, just north of Ely.

Gayton Church of England Primary School is to move to a new site in 2017. The new school will provide six classrooms, a hall and kitchen and will initially cater for 180 children, with the opportunity to expand to a 210-place school in the future to meet the growing pressures on population growth resulting from new developments being planned across the area.

A new construction centre training future generations of tradesmen has just opened at Easton and Otley College’s Norfolk campus, on the outskirts of Norwich. It is intended to help plug a perceived shortfall in the numbers of skilled workers needed to meet the region’s housing demands.

East Anglia Schools, colleges and university news

Construction Activity

Construction activity in the city itself now includes: CB1, a mixed use development next to the railway station; the Biomedical Campus which includes Addenbrooke’s Hospital; and the North West Cambridge Development which is realising the vision for a new district and extension to the City, centred around a mixed academic and urban community.

Elsewhere in the region, construction of the much needed Ely Southern Bypass is eagerly awaited, building 1.7km of road that will connect the A142 to the Stuntney Causeway to relieve congestion around the railway station.

It is also looking increasing likely that the go ahead will be given for the £178.45m Norwich Northern Distributor Road (NDR), a 20km dual carriageway road that will run from the A47 at Postwick, east of Norwich, to the A1067 north of Taverham.

Work is about to start on the Galloper wind farm off the Suffolk coast after it secured nearly £1.5 billion of funding, the 336MW wind farm will create around 700 jobs during construction and around 90 when operational.

Building Cost Guide

Whilst we do not anticipate inflation in the region keeping pace with London and the South East, we do expect it to continue at 4 to 6% for the short to medium terms, with the population hotspots, and more particularly Cambridge possibly experiencing even higher increases of 6 to 8%.

If you would like to request a copy of our Building Cost Guide, which contains further details on the cost of schools, universities and other property types, please contact one of our experts below.

Talking Points

  • Cambridge’s booming economy has led to levels of competition between consultants normally only seen in much larger population centres. 
  • House building and the need for still more housing is putting further pressure on the region’s infrastructure.
  • Two stage tendering is at times resulting in delays and increased project costs as main contractors struggle to obtain competitive tenders from their subcontractors.

Key Cost Component Tracker

The long predicted skills shortage is already hitting the region with brick layers as well as other trades in short supply, a situation which can only become more acute as house building and other construction activities in the region ramp up. Local contractors are warning of inflation in some trades possibly reaching 10% in the coming year.

Local Capability

Our Cambridge consultancy team works with numerous local clients bringing together project teams to deliver successful outcomes for our clients’ businesses. We work on a wide range of projects, ranging from £500k to £1bn+. Our prestigious appointment on the North West Cambridge Development includes client representative, strategic cost and health and safety advisors. We are also delivering all of Cambridgeshire County Council’s primary and secondary schools’ programme where we are providing project and programme management, cost management and health and safety services.

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