Election could be good for construction
SCAPE has undertaken a fresh analysis of historic data from the Department of Communities and Local Government (DCLG), Council of Mortgage Lenders (CML), Office for National Statistics (ONS) and Halifax. Some of the key finds are:
- Construction output has increased in the quarter following the majority (87 percent) of the 15 previous general elections since 1955 – rising by a quarterly average growth of 2 percent (from 4 percent in the election quarter to 6 percent in the post-election quarter).
- When examining election and non-election years, construction output growth in the quarter following an election is 6 percent, but the same quarter of a non-election year sees average output growth of just 4 percent – a drop of 2 percent.
- UK average property prices are set to rise during the election quarter. Prices have accelerated in all election years since 1983 (up from a quarterly average of 0.2 percent in pre-election quarters to 3.2 percent in election quarters).
- The number of new housing starts is also set to rise in the election quarter; in seven out of the last eight elections the number of starts increased on average 18 percent in the election quarter compared to the preceding pre-election quarter.
- In all previous election years the growth in the number of mortgages has surged in the election quarter – from an average drop of -12 percent in the preceding quarter to a rise of 27 percent in the election quarter itself.
Mark Robinson, group chief executive of SCAPE, comments: “The construction sector has traversed a rocky road, but there have been plenty of positives to take through to 2015, including recent reports that 2014 was the strongest in 18 years.
Ultimately elections look to be good news for the construction and property industries. This indicates that elections cause governments, new and existing, to prioritise infrastructure across the UK, and with new roads, school places and hospital beds desperately needed, not to mention new homes, we would urge the next government to again place construction at the top of its agenda.
Mark Robinson, SCAPE Chief Executive
This report from SCAPE makes encouraging reading. I think it reinforces industry expectations, as the election coincides with the country emerging from recession, regarding longstanding issues in core areas like housing supply and infrastructure investment. This creates greater confidence that the next government will have to invest and supportively legislate to stimulate activity.
Haydn Mursell, Cheif Executive, Kier
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