Snap analysis immediately after the event tends to be prone to knee-jerk reaction, but the thing that immediately springs to mind about this budget is the optimism regarding GDP growth in 2010 in 2011. While I wouldn't neccessarily argue with a 3.5% decline for this year, 1.25% growth for 2010 seems a little on the high side, and 3.5% for 2011 excessive. The Treasury's own analysis of independent forecasts for 2010 gives a median of 0.3%, although admittedly there are a considerable range of viewpoints.

As always these days, the 2009 Budget was somewhat construction lite, public expenditure plans now usually being announced in the pre-Budget report in November. However, the £600m of extra funding to free up housing developments will be welcome, although until demand picks up considerably more than the recent small uplifts indicated in latest transaction and approval figures, activity in the private housing sector is likely to remain low.

The various boosts for energy efficiency measures should also help the industry, although most of these have been targetted towards the social housing and new housing sectors. Unless I'm mistaken, I can see no increase in the funding available for grants to houseowners to undertakeke energy efficiency measures, which I feel is a missed opportunity.

In terms of overall construction output, the die is really already set for 2009 and none of the measures announced are likely to make more than a marginal difference to what will be a sharp downturn.  2010 and 2011 may turn out to be a little better than Experian's current forecasts of -1.7% and +1.6% respectively if the increased assistance to the housing market starts to release latent demand sooner than expected, and the R&M side should benefit from the funding boost for energy efficiency measures.

James Hastings, head of construction futures at Experian

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