Glenigan's Round Table: Market Update & Forecast

This week I had the pleasure to contribute to Glenigan | Powered by Hubexo ’s Round Table: Market Update & Forecast, at The Ivy Collection Club in Covent Garden. We discussed the Economy, the Construction Market, and, of course, the imminent Election. There was much debate on key topics and issues currently affecting our industry, with the below some of the agreed thinking…

·??????? On a macro level, things have seemed a lot tougher since Brexit.?

·??????? No surprises, a slow recovery of the economy is predicted and if all goes as per the polls, stability, and progression of projects over the longer term is anticipated.

·??????? With an expectation for more certainty towards the end of the year, we are likely to see an initial delay in public spending, but the longer-term outlook is healthier.?

·??????? We hope to see an improvement on mortgages, house prices and the cost of borrowing to come down.?

·??????? The expectation is for more refurbishments in retail and offices than new build.?

·??????? Good news is that generally sectors look to be tipping on the side of growth and recovery.?

·??????? Skills shortages remain an issue with immigration blockers, the lack of incentives to work in the UK and older workers retiring, all contributing factors.

·??????? With a shrinking workforce, we discussed modern methods of construction and how that could benefit a wider population of workers. Perhaps we can utilise the gigafactories for MMC?!

·??????? It has been a turbulent market with contractor insolvency at a high; how can we utilise the Construction Playbook more?

·??????? Talks of dwindling margins for house builders is a growing concern.

·??????? Should we be more realistic about housing targets especially given the rate at which we are currently building? Numbers being promoted have not been achieved since 1976 when circa 50% of the housing stock was social housing, whereas only 5% of what we build now is made up of social. With planning requirements (s.106) and ESG, why is that % not higher?

·??????? Anticipated focus on Energy, Immigration, Education, and the NHS.?

·??????? Nothing immediate on the Planning Bill but let’s see what the King’s Speech (17th July) sets out for that… all eyes on the Great British Railway.

·??????? Big support likely for gigafactories and data centres, as well as utilities and greener solutions.

With a possible new Government there is likely to be:

·??????? expectation to see the New Hospital Programme (NHP) moving and a focus on the NHS generally.

·??????? possibly not a completion of HS2, but better connectivity in the North.

·??????? new towns and grey / outer green belt, coupled with the freeing up brownfield, is set to be high on the agenda.?

·??????? planning guidance and a boost to local plans can be expected and a review of the NPPF guidance on renewables.

·??????? brownfield release, warmer homes, advice for the private sector on greener solutions and a possible return to growth in the economy. Lots to do, and not enough money to do it, which will likely result in higher taxes. This may well help to keep inflation down too. And stamp duty increases too (+1% touted), to help pay for all the new goodies.

·??????? a pro-business of all sizes approach, not just Small to Medium Enterprises (SMEs).

And in regard to Education:

·??????? we should expect a drive on apprenticeships and Technical Excellence Colleges… and we will need to entice folk into construction (currently we have a big pull towards digital).

·??????? University schemes have been strong but are expected to be slower growth over the next few years. There is still a question mark on overseas students.?

·??????? Longer term funding for Research & Development (R&D) is expected, a drive of support for certain types of study perhaps?

The consensus was that if there was to be a Labour coalition there is enough synergy between the policies, to make things move and given that the House of Lords has many Conservatives there will need to be a longer-term strategy in place to work together. A period of scrutiny and longer-term planning, with the ability to create stronger, enforced policy, could be on the cards.

A lively debate from an engaged audience prepared to share opinions and challenge ideas. I came away believing that the focus is on longer term recovery, rather than a quick fix.

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