It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Jonathan Heath, director of project managers and building surveyors Armsons Barlow.
The East Midlands economy is expected to continue its recovery in 2025, boosted by growth in key industries such as advanced manufacturing, logistics, and green energy.
Regional infrastructure projects like the East Midlands Freeport and ongoing HS2 developments are set to bring investment and create opportunities across the supply chain. However, challenges such as labour shortages and energy costs will require businesses to adopt innovative approaches to remain competitive.
Inflation is likely to stabilize at around 2.5%, but its effects will continue to weigh on businesses and households. While interest rates may decrease slightly, forecast changes to Stamp Duty on 1st April 2025 will also impact the housing market, both of which will pose challenges for homebuyers, particularly first-time buyers.
We anticipate continued growth in key sectors of the construction industry, with warehousing and logistics hubs maintaining strong demand due to on-going e-commerce expansion. This is particularly relevant in the East Midlands, a central hub for national logistics.
There is also likely to be sustained interest in the flex office sector as hybrid working models continue to grow in popularity.
Housing pressures will drive continued development in the Private Rental Sector (PRS) and Built-to-Rent (BTR) markets, while public sector projects in education and healthcare are expected to grow following increased government funding commitments.
Town centre regeneration will remain a critical focus. With numerous empty retail units, it’s imperative we explore creative solutions to breathe life into these spaces. A more flexible planning policy is essential to repurpose buildings into mixed-use developments, such as residential, office or leisure facilities to avoid the long-term decline of our town centres.
Nationally, we expect construction inflation to stabilise, although high borrowing costs may constrain new private developments.
The emphasis on sustainability will continue to shape the sector, with stricter carbon targets and the increasing adoption of energy-efficient building methods, such as modern methods of construction (MMC) and retrofitting.
While economic growth may remain modest, the East Midlands is well-positioned to capitalise on its strengths, offering opportunities for businesses that adapt to emerging trends and challenges.
Armsons Barlow will continue to play a pivotal role in delivering cost-effective, future-proof solutions for these evolving market needs.
