• A long-term plan that builds on the Green Homes Grant scheme could help to sustain the recovery of the construction sector

  • Stronger links between colleges and employers could make apprenticeship opportunities more easily identifiable

  • The big projects that deliver scale are not expected to come through until 2022/23

The UK prime minister compares his government’s plan for the economy to US president Franklin D Roosevelt’s New Deal programme in the 1930s, which used construction to recover from the Great Depression.

In September, the Office for National Statistics reported that “the UK is in the largest recession on record”. It is clearly at a crossroads, and Boris Johnson is looking to the construction industry to help boost the economy.

So, what are the opportunities and risks? And what role should the government play? We asked three experts to look at where the industry is now and at what might lie ahead.

This is an important time to encourage people into construction

Brian Berry
CEO of the Federation of Master Builders

“The coronavirus pandemic has been a challenging time for local builders, of whom 93% said lockdown restrictions and material shortages constrained their activities.

“Our Q2 2020 State of Trade survey, which monitors key indicators across the construction industry, asked our members to consider their experiences of workload, prices, and employment between June to August, as construction started to emerge from the lockdown, albeit at different paces in different nations.

“The coronavirus outbreak has been an unprecedented and challenging time for small to medium-sized (SME) construction firms. But the findings of this survey are a testament to the resilience of builders and their ability to bounce back, with 42% of SMEs forecasting higher workloads and 50% reporting a higher level of enquiries. To sustain this recovery, the government should commit to a long-term plan for green homes that builds on the Green Homes Grant scheme.

“Builders are casting ahead to what Brexit will mean for business. Deal or no deal, 78% of respondents are anticipating that material prices will rise in the next few months.

“While we can see clear signs of recovery, employment still lags. This is especially pertinent given the growing concerns over unemployment and the focus in Parliament on stimulus policies that support jobs and apprenticeships.

“There is clearly demand for new jobs in the industry, with builders forecasting higher workloads this autumn and almost one in five looking to recruit. This is an important time to encourage young people or career changers into construction. We all know the industry faces a skills shortage. We have a unique moment to help people into employment at the same time as the government’s recovery agenda is ‘build, build, build’.

“Local builders train 71% of the industry’s apprentices, and support for employers should therefore be directed at SMEs. We are advocating stronger links between colleges and employers, so that apprenticeship opportunities are more easily identified and communicated, and so that we better support our tradespeople leading onsite training. The government’s commitment to support adult lifelong learning is welcome, and construction courses should be made a priority.”

There is huge growth in warehouses, food retail and care homes

Tom Hall
Chief economist at Barbour ABI and AMA Research

“When we look at the relative strength of contract awards for the construction sector over the recovery period between July and September – and think about it like a weather report – it’s coming out hot for food retail but everything else in the commercial sector is cold.”

“However, office developments are unexpectedly warm, but this may be legacy projects coming through the pipeline. I am a bit sceptical and we’ll have to see if they do go ahead. Hotel, leisure and sport projects are all cold.

“In education, it’s pretty warm, while industrial and warehouses in particular are roasting. The same can be said for healthcare. Residential development is pretty cool at the moment, with the focus on completing projects already under way for the remainder of 2020. The only growth area is retirement homes, which is medium warm. Infrastructure is good and consistent with previous periods.

The signs are all positive given the government’s hopeful signals and the strong flow of projects coming through the pipeline. But the big projects that deliver scale are not expected to really come through until 2022/23

Tom Hall
Chief economist, Barbour ABI and AMA Research

“We have seen a pretty varied recovery. The general feeling is that the public sector and infrastructure are driving the recovery, while there is slower growth in the commercial sector apart from areas like warehouses, where we see huge growth, and food retail. There is also huge growth in the care homes sector.

“Across infrastructure, the signs are all positive given the government’s hopeful signals and the strong flow of projects coming through the pipeline. But the big projects that deliver scale are not expected to really come through until 2022/23.

“There is an element of catch-up coming through at the moment and we are likely to see more lower to normal activity levels for the remainder of the year. But the big risks are the continuing uncertainty from Covid-19, Brexit and increasing unemployment.”

It’s a huge opportunity to take the lead on delivering a net-zero future

Chris Richards
Director of policy at the Institution of Civil Engineers

“The upcoming Comprehensive Spending Review (CSR) will be an important moment in this Parliament for the future of UK infrastructure. Announcements are expected not just on spending, but also on how publicly financed infrastructure is appraised and delivered in the future. We also expect the conclusion of the Infrastructure Finance Review and the HM Treasury Green Book review, the publication of the National Infrastructure Strategy and new rules on outsourcing to the construction sector.

“It’s a huge opportunity for the government to state its priorities, set out crucial funding and financing plans, and take the lead on delivering a net-zero [greenhouse gases] future. Net-zero and “levelling up” will also play a significant role alongside an economic recovery package from the impact of social distancing brought in to limit the spread of Covid-19.

“Infrastructure has an important role to play in addressing CSR priorities. From levelling up, to economic recovery and supporting the transition to net-zero, the UK’s infrastructure system sits at the heart of the solution to these long-term challenges.

“The 2050 target gives the government a once-in-a-generation opportunity to recalibrate the economy and build a net-zero future. But we need to ensure the right framework is in place to do this, with a clear focus on infrastructure – transport and energy alone accounting for around 60% of the UK’s CO2 emissions.

“The right framework needs to be in place. Key components of that include a joined-up, long-term, evidence-based National Infrastructure Strategy as the primary driver for investment decisions. Accelerating investment in 5G and full-fibre broadband are the main changes required in the post-national lockdown and pre-vaccine phase of responding to Covid-19.

“However, long-term drivers of demand have not changed. These are population growth, decarbonising and addressing regional inequalities. These should remain the focus of investment decisions in the long-term.

“Another component will be a Net-Zero Infrastructure Plan, which takes decisions on the policy trade-offs needed to achieve infrastructure, particularly on the future energy mix, pathways to decarbonising transport and heat, and options for reducing emissions from harder-to-abate sectors.

“We also need a levelling up through infrastructure strategy that focuses on building regional capability to identify, finance, fund and deliver their own infrastructure requirements.

“A fourth component is a focus on whole system change in how infrastructure is delivered with a move away from tactical, project-by-project, approaches to achieving better, faster and greener delivery. We also need a co-ordinated approach across government to achieve real progress.

“We would like to see an Infrastructure Skills Plan developed to ensure the UK has the capability within the built environment sector for the transition to net-zero. With the effects of Covid-19 on employment rising, there is a clear opportunity to signal the jobs of the future through such a plan.”

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