Autumn budget a ‘critical’ moment for construction industry, says Lancashire expert

Looking ahead to Wednesday’s (October 30) statement, Joe Sullivan, a Lancsahire-based partner in the real estate and construction team at national accountancy and business advisory firm MHA, highlighted the sector’s ‘glaring omission’ in the government’s recently announced Invest 2035: UK Modern Industrial Strategy.

The S&P Global’s Construction Purchasing Managers Index (PMI) has maintained a position above 50 for several consecutive months including jumping to 57 in September, a two-year high. Joe said this reinforced the sense the sector was on the path to recovery, buoyed by improved supply chain conditions and a notable reduction in labour shortages.

However, he claimed there were several headwinds facing the construction industry and it was critical for the government to use the budget to include the sector its growth plans.

“While the announcement of Labour’s housing plan has been welcomed, our clients are telling us that the uncertainty as to further announcements in this month’s budget is causing a delay with investment decisions,” said Joe.

“Achieving the government's housing targets will require planning reforms and significant investment in infrastructure, such as transport, schools, and healthcare, along with policies to attract businesses and create local employment opportunities.

“The industry also faces an urgent skills shortage. The Construction Industry Training Board estimates a need for 152,000 more workers to meet housing targets, while the Home Builders Federation highlights that one in five builders is over 50, underscoring the need for fresh talent in the sector.”

Joe added recognising construction as a key growth sector in the budget would ensure access to the necessary investment and policy support.

“This includes funding for skills development, incentives for sustainable 'green' construction practices, and streamlining planning processes to make it easier for firms to meet the government's housing target of 1.5 million new homes and a new generation of towns,” he said.

“The budget will be a critical moment for the industry, with the potential to set the tone for the coming years. With careful planning and strategic investment, businesses can position themselves to capitalise on the evolving market landscape.”

MHA, ranked the 13th largest accountancy group in the UK, has 20 offices across the UK including Lancaster and Preston. MHA is also the UK member firm of Baker Tilly International, the world’s 9th largest international network of independently owned and managed accountancy and business advisory firms.