First reaction: What the Budget means for construction

Direct impacts for construction from the budget appear to be more long term than short term.  The carbon floor was due to be announced anyway and gives energy companies confidence at a moment when the sector has taken a battering over Fukoshima.

£30/tonne is at the low end of expectations. This could create a window of opportunity for generators to profitably delivery gas-fired generation into the UK to close the energy gap.

The hypothecation of business rates in Enterprise Zones creates a TIF-style opportunity to lever initial infrastructure for future manufacturing capacity.  The spread of the EZs is encouraging but the funds available are limited.

Structurally some of the most interesting changes are related to training and education.  Support for apprenticeships and technical universities could provide the help the industry needs to close the skills gap.

In terms of immediate spending, as expected, the industry is unlikely to see much of a boost.  The housebuilders will be delighted to see a resumption of support for shared equity - although the impact on additional construction will be limited - perhaps a 5% increase in housing spend over the next two years.  Other investment in rail, universities etc are welcome but at the margins.

One of the big unanswered questions relates to planning and how NIMBYs unleashed by localism might delay the actual construction that the country can affords to build.  The Chancellor gave clear hints of a redress of balance back to development through the presumption to build.  Perhaps construction will have the opportunity to contribute to ’Start-up Britain’