Glenigan comment on Autumn Statement 2012

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The Chancellor’s Autumn Statement provides some specific good news for the construction industry. In particular, the Government is to squeeze current spending, investing the released funds in new education, science and transport programmes. The Private Finance Initiative has also been re-launched as PF2, with education again being a prime beneficiary via the £2.4 billion Priority School Building Programme. 

However, the official OBR forecast for weak economic growth in 2013 and 2014 indicates that the anticipated recovery in private sector construction activity will remain constrained over the next two years. 

The long awaited re-launch of the Private Finance Initiative is welcome, but it is vital that delayed projects are now quickly brought to financial close. The Government’s decision to reallocate funds if projects have not selected a preferred bidder within 18 months may help to concentrate minds, but also is also an indictment on how long it has often taken to deliver such projects to site in the past. 

Similarly, the re-direction of £5 billion of public sector efficiency savings towards infrastructure, science, further education and school projects can act as an important catalyst for wider economic growth if supported projects are quick to start on site.   

The importance of prompt action is underlined by the official OBR forecasts for weak economic growth in 2013 and 2014, indicating that the anticipated recovery in private sector construction activity will remain constrained over the next two years.

The Glenigan economics team have produced a comprehensive analysis of the impact the Autumn Statement will have on UK construction. Download a copy of this FREE report here.