How the government can restore confidence and stimulate growth

Following months of political and economic turmoil – on both a domestic and global scale – the UK construction sector requires stability and certainty from the new government to restore investor confidence and enable projects to go ahead. With last week’s appointment of Rishi Sunak as prime minister comes hope that the government will prioritise supply-side policies to address the issues faced by many industries. Construction in the UK is no different.

During Liz Truss’ short-lived tenure, the government’s focus was said to be on “growth, growth, growth”. It was supported by demand-side policies such as tax cuts and changes to stamp duty, but little in the way of supply-side initiatives accompanied this mantra.

Even more worryingly, monetary and fiscal policy were at odds, making tackling inflation impossible. Now is the time to change all that, restoring confidence and achieving economic growth, by addressing what is really holding the UK back in comparison to its G7 peers (the UK is the only economy in the G7 which has not yet recovered to its pre-pandemic levels of GDP).

So the Sunak government needs to announce a suite of supply-side policies to support the construction sector and increase its productivity as a step towards this goal.

More must be done to facilitate the import of materials from the European Union

Obviously, the major issue facing the global economy at the moment is inflation. In the construction industry this is particularly noteworthy as it is pushing up the cost of materials, creating inaccuracies and uncertainties in budgeting and resulting in projects being delayed, or in some cases becoming completely unviable.

Supply-chain disruption continues to affect the sector. Materials such as timber, cement and steel remain impacted by the pandemic, keeping prices high. This issue is exacerbated in the UK, as the country faces barriers and bureaucracy post-Brexit, creating further challenges for the import of materials. More must be done to facilitate the import of materials from the European Union to tackle this.

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A further problem is the shortage of construction workers. This has been an  issue for a number of years due to a lack of skills and training, as well as an ageing workforce. It was only made worse by the pandemic and Brexit, which saw many workers leave the UK and fail to return.

The government must be pragmatic in its review of immigration policy and could consider, for example, changes to visa requirements specifically for construction workers. Ministers must understand that our industry relies on highly skilled workers to deliver much-needed housing and other essential infrastructure.

A career in the construction industry provides a unique opportunity for young graduates to join a sector that is never short of challenges and  is certainly never boring

More also needs to be done to promote the prospect of a career in construction to those already living in the UK, including providing support for skills and training programmes to boost the number of people turning to the sector as a career path. Programmes such as apprenticeships should be better publicised for students and younger people.

>> Also read: Sunak planning radical skills reform to tackle low productivity

A career in the construction industry provides a unique opportunity for young graduates to join a sector that is never short of challenges, and which is certainly never boring. In this field, the UK is lagging behind its European counterparts where construction careers are seen much more positively.

Legendre works with top UK universities to increase awareness of the sector among graduates. This needs to be scaled up and reinforced with government support. Work also needs to be done to improve diversity within the sector, including programmes to encourage more women to join the often male-dominated workforce.

The election of Sunak and his appointment of a new government offers the perfect opportunity for the implementation of long-term solutions to benefit our industry. The UK could and should be a world-leader on low-carbon construction, but the prime minister’s reluctance to attend the COP27 climate summit in Egypt this month certainly does not reflect well on his professed commitment to tackling climate change and achieving net zero goals.

Following a tumultuous period in UK politics and economics, construction does not need a “silver bullet” or flashy policies. Instead we need a set of well-thought-through policies which will allow the industry to plan ahead, drive economic growth and tackle the nation’s housing crisis.

Thomas Vandecasteele is managing director of contractor and developer Legendre UK