Planning Portal Annual Conference 2021
15-18 November 2021
Planning Portal Annual Conference 2021
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Why UK Construction Must Prepare For Slower Population Growth


Brexit and Covid-19 put an end to the UK’s high population growth. This presents a challenge for construction.

Imagine you could use one graphic only to describe the uncertainties and possible divergences facing UK construction today.

That’s tough. There is so much change afoot. Net-zero carbon targets? Digital technologies distorting demand? Off-site manufacture and labour shortages? Radical changes flowing from the pandemic?

Maybe…

But a hot favourite must be a comparison of population projections. This might seem both odd and dull, but not when you consider one simple fact. Construction is about people.

There’s no precise correlation, but population growth, up or down, profoundly affects the level of construction activity. It also influences the mix of work.

Rapidly rising population means more new houses. It means more new shops, offices, and infrastructure. For two decades this has been the norm for UK construction as the population swelled by 8 million – almost 5 million down to abnormally high net migration.

Yes, climate change is fundamentally altering demand, along with repercussions of Covid-19 and digitalisation. But a halt to population growth would completely reconfigure demand in the UK built environment.

We have grown used to the population always rising. But the thing is, a fall is not as wildly unlikely as many might expect.

The Office for National Statistics principal population projection suggests growth of 2.6 million people over the next 10 years. This is a projection built on assumptions not a forecast. It ignores the effects of Brexit and, obviously, the pandemic.

One big assumption is that net migration will add 190,000 people to the UK population every year, based on the 25-year average. But those years saw aberrantly high immigration, which was always likely to ease naturally. For reference, in the previous 125 years, UK net migration resulted in population losses averaging 90,000 a year.

Interestingly, while there are no hard official figures, most data suggest the pandemic sparked a major outflow of EU citizens. This could mean a net loss in 2020, potentially of hundreds of thousands.

What if this loss is permanent? Indeed, what happens if UK net migration ends up zero from now on?

The ONS has a population projection based on zero net migration. It suggests a UK population in 20 years with 5.6 million fewer people than in the principal projection. More importantly, in eight years from now the population would be shrinking and be more elderly. That raises big questions.

Would we need more new homes? More new roads, railways, shops, offices, and schools? The answer is some, but far fewer and a different mix.

The likely impact would be a lurch from new build to repair and repurposing of our existing stock. With a falling population, who would support a political target of building 300,000 new homes a year?

Zero net-migration may not be that likely. But much slower population growth is.

So, given the huge uncertainty, we should at least be considering what these very different future population growth paths might mean for construction and the built environment. Things will be different.

That is a certainty.

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