UK: construction remains key to growth

UK construction activity remains a key plank in the government’s growth strategy according to the Chancellor, George Osborne, who outlined several initiatives in his Autumn Statement, which he hopes will help stimulate the recovery the economy desperately needs.

George Osborne also recognised the need to divert current expenditure savings into capital investment and announced an additional GBP5bn investment over three years. However, there is little evidence that this will have much impact, as the industry is currently contracting by more than double that amount every year.

Responding to this announcement, the Construction Products Association’s chief executive, Diana Montgomery said: "The Chancellor clearly recognises the need to stimulate growth through construction activity and has made several announcements that are a step in the right direction. However if you put these announcements into context, the benefits to our sector are less clear. Throughout this year, construction has been contracting by GBP1bn each month, so his announcement that there will be an additional GBP5bn added to the capital budget over three years, will do very little to offset the losses we are already experiencing, especially as that GBP5bn is not just for construction but includes IT, exports and skills.

"Although the Autumn Statement included a number of re-announcements we do welcome the emphasis on road maintenance and repair which will benefit from GBP725m from April next year. This was something we called for in our letter to the Chancellor last month and we are pleased he has heeded our request.

"It is also very welcome that UKTI will have its budget increased by 25%.  Export activity to both existing and emerging markets must play an increasingly important role for the country over the coming years and this increase is an important recognition that the government is serious about supporting UK companies in their drive to succeed in new markets abroad."