Market Intelligence Reports

Overview

The much-anticipated Autumn Budget set out the new Government’s plans for driving economic growth, with Construction clearly playing an important part in underpinning their strategy.

The budget was delivered against the backdrop of a challenging and uncertain economic environment which is reflected in the results of our Quarter 4 report. Despite the inevitable regional vagaries, the overall picture during the quarter was one of decreased workload and increased costs, albeit with inflation continuing to cool.

Whilst concern naturally persists that the recent increase to Employers’ National Insurance contributions is likely to place additional strain on construction budgets, the announcement in the Autumn Statement of additional funding for public sector projects, in particular in education, housing, transportation and healthcare, has been greeted positively by our clients. Moving into 2025, this fresh injection of capital will hopefully help arrest any trend towards falling workloads and stimulate the type of growth that largely eluded the sector in 2024.

The Government’s drive to devolve power from Westminster to local regions represents a significant shift in approach and a key Government lever to increase growth and improve living standards at a regional level. Here in the West Midlands, the Combined Authority have become the first region in England to receive one of the Government’s newly announced “Integrated Settlements” with a payment of £389 million being announced in January 2025.

The release of the “Devolution White Paper” in December serves as a further declaration of the Government’s intent in their “Devolution Revolution”. The paper is predicated on improving efficiencies and capability, driving out fragmentation, making the best use of every pound and avoiding duplication. These objectives are very much shared by the NACF and our member frameworks and the guiding principles upon which our respective frameworks are founded. In an era of ever diminishing resource within the public sector we believe that making more effective use of public frameworks, and in particular, regional public frameworks, to procure public works is entirely aligned to the overarching objectives of the white paper.

With the recent demise of ISG serving as a timely reminder of the volatility of the sector, we hope that the Government’s strategy to ‘Get Britain Building’ is matched by a desire at a regional level to do so in a manner which is economically sustainable for all parties and we believe the best way of doing this is through working with NACF accredited, regional frameworks.