NACF Market Intelligence Reports

Overview

The newly installed Labour government has lost no time in setting out its priorities for public construction projects. A consultation on reforms to the National Planning Policy Framework (NPPF) to support its ambitious plans to deliver 1.5 million homes in 5 years is already underway, which if implemented would give a much-needed boost to the housing sector. Restoration of local housing targets and opening up of development opportunities in ‘grey belt’ areas may not be universally popular, however, and may be a key factor in whether these targets are achieved. 

Relative stability has returned to the materials supply market, but ongoing shortages of Fly Ash and GGBS continue to challenge those seeking lower carbon concrete structures. The cost of operating electric arc furnaces as a low carbon alternative to traditional blast furnaces is also pushing up the cost of lowering embodied carbon in projects. 

Labour availability is expected to remain tight; industry awaits the outcome of a planned review into the raising of the skilled worker salary threshold to £38,700, that, despite the government’s pledge to reduce the UK’s reliance on overseas workers by training and upskilling local workers, is seen as key to meeting industry demand. 

Cancellation of key infrastructure projects such as the Stonehenge Tunnel and Arundel bypass projects may provide respite from labour shortages but also weaken confidence in the market. It remains to be seen whether the government’s anticipated ten-year plan for infrastructure will provide assurance, or if overall economic performance in the coming years will be the only true enabler of a return to confidence in the infrastructure delivery market.