General Election 2015 comment: Impact on construction industry

Last Updated:

8th May 2015

Commenting on the outcome of the 2015 General Election, which forecasts a Conservative majority government, Glenigan's Economics Director Allan Wilén said:

“Recent months have seen a cooling in construction activity. Indeed, the latest Glenigan Index recorded a marked drop in project starts, as private sector developers postponed decisions in the run up to the general election and government-funded projects were caught up in the traditional pre-election hiatus.

“With the votes now cast and the Conservatives set to form the next government with a small majority, the short term political uncertainties have now eased.

“However, over the next Parliament, the UK faces five years of constitutional change with a promised referendum on the UK’s EU membership by 2017, the prospect of further Scottish devolution and potentially a fresh vote on Scottish independence.

“The economic uncertainty posed by the European Referendum, in particular, is a potential threat to private sector investment over the next two years.

“Public sector capital expenditure programmes are likely to be squeezed hard as the new government strives to deliver its planned reduction in the Budget deficit. While Conservative plans for large scale investment into the strategic road network bode well for construction, the sharpest increase in capital funding is not planned until after the next general election.

“Moreover, with a wafer thin majority, the Conservative leadership will not be able to push through Bills against the will of rebel backbench MPs. It will be vital that the government builds cross-party support to ensure that important long-term decisions, such as HS2 and additional airport capacity in the south east, are not stymied by local Conservative backbenchers.

“Housing emerged as an important political issue during the election campaign, with need to increase housing supply an area of clear political common ground. Planning reforms made by the Coalition government have enabled more housing permissions to be brought forward, while the Help to Buy scheme has provided much needed support for the housing market.

“However it is essential that the Conservative administration now builds on these reforms. Their stated aim to provide ‘200,000’ Starter Homes by 2020 would ease some strain on first time buyers, but this will need to be part of a wider strategy to solve the severe shortfall in homes.”

PR contacts:

Kirsty Maclagan (Marketing and Communications Manager)

T: +44 (0)1202 786 842│E: kirsty.maclagan@glenigan-old.thrv.uk

Allan Wilén (Economics Director)

T: +44 (0)751 579 4625| E: allan.wilen@glenigan-old.thrv.uk

Notes to the Editor:

Glenigan is the UK’s leading provider of construction data, contract leads and construction market analysis. Combining comprehensive information gathering with expert analysis, it delivers timely insight into UK construction activity. Glenigan customers include government agencies, construction companies and suppliers of materials and services to the industry.

Glenigan data covers all construction sectors, including education, health, hotel and leisure, industrial, infrastructure, offices, private housing, retail, social housing, and utilities, and spans across all 13 regions of the UK.