General Election impact on construction
May’s General Election is set to create growth in the property and construction sectors, regardless of whichever party gets in power, that’s according to findings in a new report compiled by the SCAPE — a public sector owned built environment specialist offering a suite of national frameworks and innovative design solutions.
The figures highlights that construction output has increased in the quarter following the majority (87%) of the 15 previous general elections since 1955 — rising by a quarterly average growth of 2% (from 4% in the election quarter to 6% in the post-election quarter – see Graph 1 in the document).
When examining election and non-election years, construction output growth in the quarter following an election is 6%, but the same quarter of a non-election year sees average output growth of just 4% — a drop of 2%.
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% in pre-election quarters to 3.2% 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%, in the election quarter compared to the preceding pre-election quarter.
With just 41 days to go until the polls open, the new research reveals that the election period is set to have a positive impact on both the construction and housing sectors — stimulating both construction output and boosting average property prices.
Mark Robinson, group chief executive of SCAPE, commented: “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.”
This report from SCAPE makes encouraging reading. I think it reinforces industry expectations, as the election coincides with the country emerging from recession, regarding long-standing 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, Chief executive, Kier
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