An estimated £3 billion worth of contracts outlined for the construction of industrial warehouses have been agreed across the UK this year, in order to reach increasing demand for storage space.
According to construction analysts Barbour ABI, the first three quarters of 2018 saw a £2.2 billion accumulation of warehouse construction contracts, an increase of £800 million since 2016.
The growing popularity of online shopping, coupled with the competitiveness of delivery speeds, is seen as one of the notable causes of this trend. As businesses have adapted to this shift, the demand for storage space has principally increased – leading to the construction of new warehouses and storage units.
From a regional perspective, the Midlands has seen the highest growth in warehouse construction with £2.6 billion worth of contracts awarded since 2016, which is £400 million more than any other region. Centrally-located, the region is an attractive area for businesses to invest in, due to its many accessible motorway links.
Lead Economist at Barbour ABI, Michael Dall, said: “With an increasing amount of shopping taking place online, we expect the number of warehousing construction contracts to continue to increase. In 2017 Barbour ABI recorded a 22% increase compared to 2016 and it is likely we will see a similar increase in 2018.
“With a number of these being Amazon warehouses, and considering the ambitious growth plans they have, this is clearly an area of construction that is primed for growth.”
Barbour ABI, leading supplier of construction intelligence Services, is the provider of Construction New Orders data to the Office of National Statistics, and a partner of the Government’s Infrastructure and Projects Authority.