100 Days of Labour: Effects on the Construction Industry

Welcome to 'What's new in construction?'. The Barbour ABI newsletter features market-leading intelligence, expert commentary and market analysis reports. Simply put, it helps you stay ahead of the ever-evolving construction landscape.

Our first edition of the newsletter analyses the first 100 days of the Labour Government and how this has impacted the construction industry.

On Tuesday 15th October, Head of Business and Client Analytics, Ed Griffiths, held an exclusive webinar for our clients to discuss the effects of the first 100 days of Labour on the construction industry.

The webinar started by addressing directly the volume of change, or lack thereof, that the UK has experienced. The pursuit of an industrial strategy is quite apparent thus far to drive growth and generate jobs, recognising the strong correlation between growth in GDP and the proportion the UK population that are working.

Ed also addressed key highlights that covered the current climate of the construction industry.

Current Climate of the Construction Industry

Building Safety Act

Currently there are issues concerning inconsistencies, rules and regulations that are unclear as well as delays due to capacity of those in charge.

General Election and Labour

Ed commented that people have adopted the ‘wait and see’ strategy as these 100 days of Labour Government appear quite rocky, which has created uncertainty in the construction sector. The first 100 days of Labour effects on the construction industry have been a topic of intense scrutiny, especially given the challenges the industry already faces.

Material Inflation

The cost of goods that are used to build projects has inflated at a substantial +52% when comparing 2015 figures.

Interest Rates

The UK has seen interest rates come down, with a possibility that more cuts will come.

Immigration

Labour and Conservatives have advocated for the focus on upskilling those in the UK first before migrant workers. This focus has its implications on the industry as historically we’ve relied substantially on migrant workers, thus the decrease of migrant workers could have a negative outlook on the overall workforce.

Insolvencies and ISG

Ed previously hosted a live briefing on the ISG administration and the impact of the collapse.

In the last 12 months there have been 4,373 businesses that have gone out of business or insolvent; a 40% increase when compared to 2015 figures.

Skill Shortages

385,000 skilled workers have left the construction industry since 2019. In a very similar vein to the immigration point above, how can the UK’s construction industry continue at these rates if the issues are not addressed?

October Budget

The budget will be assessed in October of this year. Ed stated that it is being described as a ￡22bn black hole.

Help to Buy Scheme

Ed suggested that for housebuilding to increase, there needs to be incentive for the average consumer to be able to buy houses. The Help to Buy scheme for residential buyers ended in 2023, will we see a resurgence to stimulate growth in this sector?

Access the material covered in Ed's session along with further detail here.

ISG Administration Bulletin

We will continue to update on the status of selected large projects that ISG were working on in these briefings.

We’ve confirmed that two fire stations in Greater Manchester (Whitefield and Blackley stations) have gone back out to tender, with several new bidders on each project.

There are no further updates yet on the status of two of the major projects that Ed discussed in the live briefing (HMP Ford Open Prison and HMP Guys Marsh). We have enquired into the status of further prison contracts that ISG held, such as the House Block Expansion of HMP Birmingham, with it confirmed to us that there is no update on this project yet.

We’ve had it verified to us that several education projects (including the Millbay Academy Extension and the Melksham Pathfinder Primary School Project) will be reviewed by the Department for Education in the next 2-4 weeks.?

Sign up to receive the next ISG Administration Bulletin.

Construction Industry Monthly Snapshot

Our latest Construction Industry Monthly Snapshot data shows that any change in industry sentiment or confidence levels is yet to be reflected in contract award or planning approval data. Contract awards for September were over ￡10bn. Even once removing the two major infrastructure projects worth ~￡4bn from the data, this is still comfortably above September 2023’s figure of ￡4.9bn.

Planning Approvals data was also strong almost across the board in September. ?

As Planning Application data is presented one month in arrears, it is still too early to spot any trends in that dataset yet.?

Discover the key factors influencing the construction industry, prepared by expert economists and powered by our market-leading intelligence. Subscribe here.

Discover the Top 50 Contractors, Clients and Architects

Everyone loves a league table. Whether it is to benchmark or target for collaboration, our League Tables highlight the Top 50 Contractors, Architects and Clients for the month, as well as the last 12 months.

Topping the tables this month are:

Contractor: Midland Metro Alliance

Client: Orsted

Architect: Stantec

Download October's edition of the report here.