Construction after Brexit: Chairman’s View
15th September 2016 | David Jackson
So are we heading back into recession? Or not? It’s a question that’s never far from the headlines at the moment. The UK economy is in slowdown – which is to say that in the three months to August, it grew by just 0.3 per cent, according to data from the National Institute of Economic and Social Research.
At Hudson Contract, we have observed the number of operatives, averaged per client, has dipped by 4.5% since we voted to leave the EU. But it remains to be seen whether this is simply an output blip, or the start of a longer-term downturn.
There are many factors to be considered, but personally, I have an impression that any downturn may be relatively short-lived. I recently read an article written by HSBC’s Chief Economist that credited the Government with a string of convincing actions since the vote. These include:
- New leadership headed by Theresa May
- Ruling out an early General Election
- Deciding against an emergency budget
- Taking time to speak with European leaders
- Not triggering Article 50 this year
All moves that seem to make economic common sense.
The HSBC article went on to reflect that uncertainty about the UK’s future participation in the single market is currently playing a big part in holding back investment. However, there are hopeful signs that retaining access to the European Economic Area (EEA) through the safeguards written into the Maastricht Treaty, may provide some ‘softening’ to make an agreement possible.
The government has also announced spending-stimulus plans to increase invitations to tender for procurement – including additional freelance support staff, NHS purchasing, and new energy provision for social housing – by fifty per cent.
Then there are plans to build a road tunnel twenty-two miles under the Pennines, along with pre-tender action on HS2 . . . personally, I would prefer to see the specification on the train speed cut, in order to spend a more sensible sum on the infrastructure and building costs.
Overall, I’m definitely one who sees the construction industry’s glass as half-full. I believe private enterprise can – and will – build if the government continues to act decisively and positively to minimise the uncertainty created by the Brexit vote.
After all, we’ve seen how Team GB can perform. Now it’s time for the whole country to follow the mantra of our elite athletes and ‘Believe’.