Election result 2017: What does it mean for the construction industry?
Uncertainty seems to be the biggest result of the shock election result. For the construction industry – which was already in an uncertain place thanks to Brexit – it can only mean more of the same.
A new Housing Minister Alok Sharma has been appointed, following Gavin Barwell losing his Croydon Central seat to Labour.
Housing has been key for all parties, and much work was done on the subject before the election with the Housing White Paper “Fixing our Broken Housing Market”, which aimed to tackle the current housing shortage. It is not clear as yet how much of that will still be taken on board, but all parties were clear that what the UK does need is more housing.
The Conservatives have pledged one million new homes by 2020, and another 500,000 by 2022, but with talk still rife that there will be another election in the not-too-distant future, these figures can’t be relied upon.
And with so much political uncertainty, it is likely that the housing market may stagnate or even fall, which will obviously have a knock-on effect for builders. It can only be hoped for the industry’s sake that the new government gets up and running quickly.
One of the other results of the Brexit referendum was the skills shortage. A hard Brexit could leave many European workers unable to work in the UK industry, but it’s thought that the new government will focus on a softer Brexit, which could be good news for anyone concerned about having an adequate supply of labour.
With so much indecision around the government – and with the prospect of another election – another worry is that major infrastructure projects will be put on ice.
The already weak pound has also been hit by the result – it dropped by 2% as soon as the exit polls were revealed – not helpful for an industry that is already being affected by higher material costs. The big house builders also took a hit on share prices after the election results, which could also see them stalling on major projects.
Affected construction projects
However, the surprising alliance with the DUP may see plans for a number of construction projects in Northern Ireland forge ahead – among them multi-million pound investments in roads, railways and transport hubs and the foundation of £1bn Northern Ireland investment fund.
Infrastructure projects that may be delayed, instead, include Crossrail 2, which failed to make it into the Conservative manifesto last month, as the Tories instead focused on new rail lines for the North and HS2.
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