General Election 2015 - What Does it Mean for the Construction Industry?
In the wake of the recent general election, we’re taking a broad look at what the result means for the construction industry here in the UK. The shock election result has received a tentative welcome from the construction industry but there are concerns that a referendum on Britain’s membership of the European Union could present some problems in the future. Contractors, subcontractors, consultants and industry analysts reckon that the consistency that we’ll see from not having a change at the top levels of government could be a boost for the construction industry. This means that the government is able to move into the next phase of existing policy to sort out the economy and keep the underlying public sector spending in place. There had been fears that a win for Labour government would result in a coalition government that may have derailed some of the UK’s largest projects.
However, some of the pundits are warning that David Cameron’s promise of an EU referendum by 2017 could be viewed as a “potential threat to private sector investment” over the coming years. There is also cause for concern at possible public sector spending cuts and it’s hoped that the new government will build cross party support to ensure that important long term decisions such as HS2 (the planned high speed railway) and additional airport capacity in the south east are not stymied by local Conservative back benchers.
A referendum is a particular worry because there is a danger that if the vote goes the wrong way it could delay investment decisions which could have a knock-on effect on the construction industry in the UK.
At this moment, although Nick Boles remains as Skills Minister, it’s not yet been confirmed whether he will retain the construction portfolio. Some in the industry have been calling for a Construction Secretary or an Infrastructure Secretary, but right now plans for this appear to have been shelved.
When it comes to infrastructure dev elopement, one of the most important tasks is to keep Britain creditworthy – this will maintain confidence in the UK’s ability to borrow money at cheaper rates.
With recent news that construction activity increased for the eighth consecutive quarte3r in Q1 2015, maintaining this momentum is essential if we’re going to recover from the economic downturn.
The construction industry leading players are also closely monitoring the new government’s promises for the education sector. Future labour shortages could pose problems for the construction sector as 75% of construction businesses reveal that they expect more work in the next 12 months or so. Providing enough skilled labour for future projects may become a challenge as research carried out by RICS (the Royal Institution of Chartered Surveyors) highlighted this issue. A massive two thirds of construction companies disclosed that they are concerned about the impact that the skills shortage will have on their ability to successfully complete building projects in the near future. RICS warned that the predicted construction sector growth of 3.8 during 2015 will only be possible if enough skilled workers are available.