Proposed investment in land and property from manufacturing companies continues to grow as planning application floor space for factory construction increased by 50% in 2014 and is on track for a further 40% growth in 2015.
The latest report from Barbour ABI, a chosen provider of construction data for the Office for National Statistics (ONS) and the government, shows significant growth for factory planned floorspace from March 2014 to last month, based on a 12 month rolling average.
Total planned floorspace in the manufacturing sector was 2.2m sq m in 2014, with a growth of 50% from the previous year. This follows the same upward trajectory in manufacturing output, which increased by 2.9% in 2014.
Planning application floorspace in March had a yearly increase of 56%, the largest of any month in the report, which dates back January 2011, with 199, 296 sq m of planned floor space. In the first four months of 2015, planning applications have totalled 1.1m sq m which, if continued, would mean total planned floor space will be in excess of 3m sq m for the full year.
Despite recent signs of a slowdown in manufacturing through both GDP and Markit PMI surveys, investment intentions from manufacturers in property appears to remain strong. Planning applications for factory floor space is an indication of the longer-term optimism of manufacturers, both in terms of increasing and improving factors of production.
Michael Dall, lead economist at Barbour ABI, said: “With planning applications continuing to rise, businesses and investors appear to be preparing and planning long-term financial commitments within the industry.
“Despite the signs of a recent slowdown, the capacity of the UK manufacturing sector is set to increase. Whether this fully transfers into increased output remains to be seen but it certainly shows that an appetite for investment remains strong.”