Construction Products Association

CPA Economics Director Noble Francis has this focus on construction wages. UK construction wages rose 6.9% in nominal terms & 4.6% in real terms in the year to October 2024, partially reflecting an acceleration in house building demand from a low base (& why it has been on a upward trend since the nadir in 2023 Q4) but given that activity in house building still remains subdued, despite early signs of a potential recovery, the strong wage growth is also likely to reflect the acceleration in the loss of skilled construction trades & prevalence of skilled trades. Construction wage inflation data can be quite volatile so be careful of making too much of October's data alone but note that if this level wage inflation persists or even increases as house building continues to recover then rising wage costs due to skill shortages would exacerbate issues for house builders & contractors in 2025 as they already have to deal with the employers' contributions to National Insurance & expected rises in building materials prices in 2025 H1. For more economic insight, follow this link: https://lnkd.in/eg2-bCMy

This is good news for UK manufacturing. Lord Richard Harrington has a excellent track record in government and the sector. We were delighted to have been hosted by him for our recent parliamentary reception. The CPA looks forward to our continued work with Make UK and Lord Harrington.

Last week the CPA had a parliamentary reception for our members in the House of Lords. We were kindly hosted by Lord Richard Harrington. We heard excellent speeches from Shadow Minister Kevin Hollinrake MP, Luke Myer MP and CPA Chairman Adam Turk. It was a very enjoyable and useful event demonstrating the importance of construction manufacturing to parliament and government in keeping the economy moving and getting the UK building. If you would like to know about membership click on this link https://lnkd.in/eiQpKpwB

The CPA is a leading member of the ongoing work on competence and is pleased to share this excellent work. The Industry Competence Steering Group (ICSG) has today announced a comprehensive restructure to enhance competence and safety standards across the built environment. Established in response to the Grenfell Tower Fire and subsequent Hackitt Review, ICSG has now transitioned to become a formal working group of the Industry Competence Committee (ICC) under the Building Safety Regulator (BSR), signalling a strategic shift towards more rigorous industry-wide competence frameworks. Learn more here: https://lnkd.in/exU43bTK

Tomorrow will be the built environment conference where both the CPA CEO Peter Caplehorn and Hanna Clarke the CPA Digital and Policy Manager will be speaking. This important virtual event is hosted by the BSI. Please follow the link below to register.

Nearly time for CEO Amanda Long to feature as part of the below panel Nov 20th 10am.

The CPA Autumn Lunch was a great success again this year, with speeches from CPA CEO Peter Caplehorn, Chairman Adam Turk, our chosen charity CRASH - Construction Industry's Charity, and our special guest Martin Bayfield. Many thanks to all attendees, and especially our event sponsors Barbour ABI, BESA Group, EJ, InstallerSHOW, Kilsaran and Siderise Group.

A fall in business investment is now expected in 2025 as well as 2024. The OBR notes that although higher government investment increases incentives for businesses to invest as well, in the near-term this is more than offset by the crowding out effect of the fiscal loosening in the Budget. Consequently, growth rates in 2026 and 2027 are lower than in the March forecast that accompanied the Spring Budget. To find out more about The CPA budget reaction and analysis register today: https://lnkd.in/ewbYTgRz

The CPA have reacted to the Budget. Commenting on today’s Autumn Budget announcement, CPA Economics Director, Professor Noble Francis, said: “The Chancellor announced a challenging Budget that we believe provides room for cautious optimism. Whilst prioritising the stabilisation of UK finances and promotion of growth across the economy, there were a number of measures related to supporting the construction and manufacturing sectors and our key asks. Chief amongst those will be the near-term spending increases in affordable house-building; continued spending on repair, maintenance and improvement for a select group of hospitals; a wider commitment to increased capital investment including maintenance programmes for the NHS, schools and transport infrastructure including an almost 50% increase in funding for local roads maintenance; fuel duty relief (our sector is one of the largest users of the road network); an initial £3.4 billion towards heat decarbonisation and household energy efficiency through the Warm Homes Plan over the next three years; incentives for corporate R&D investment and provision for a new Industrial Strategy. “That said, we also have concerns over the Government’s 10-year infrastructure and new housing strategies, which the industry will have to wait until Spring 2025 at least to learn about. Similarly, the New Hospitals Programme remains under review, although details are expected sooner, in November. Whilst the significant rises in the National Living Wage will benefit workers, it will increase costs significantly for employers. This is not only due to those on the National Living Wage but also for those on the levels above this who will want to maintain the premium. In addition, the increases in employers’ contributions to National Insurance will also add extra costs for employers at a time when the construction product manufacturing and distribution sectors have been hit hard over the last 18 months. Finally, whilst talking so much about investment, the government has decided not to progress with the road schemes on the strategic road network such as the A5036 Princess Way, A358 Taunton to Southfields, M27 J8 Southampton, the A47 Great Yarmouth Vauxhall Roundabout and A1 Morpeth to Ellingham. “This Government will soon face a critical juncture, when its plans and ability to deliver its national infrastructure and construction pipeline will hopefully establish its credibility with industry, in marked contrast to its predecessors. Our hope and ambition is that Government appreciates the importance of the UK construction sector as an enabler for growth, productivity and so many of its policy ambitions."

The CPA has now published Construction Industry Forecasts Autumn 2024. Construction output is forecast to fall by 2.9% in 2024 but coming towards the end of the year, the focus is clearly on next year and construction output is forecast to rise by 2.5% in 2025, which is slightly more positive than expected three months ago. The wider UK economy appears to be in a stronger position than it was 3-6 months ago and early indicators for the two largest construction sections, private housing new build and private housing repair, maintenance and improvement (rm&i) point towards growth in 2025. In addition, activity in the industrial sector has picked up earlier than anticipated due to some large one-off projects. The forecasts for the other key construction sectors remain similar to three months ago, as many firms operating in commercial refurbishment and fit-out or working on major infrastructure projects continue to experience robust activity. access the report here: https://lnkd.in/eBGsFUZz