In July, the UK’s construction sector growth hit the highest level in more than two years with paused projects going ahead and improved consumer confidence. This uptick in growth may have been linked to Labour’s pledge to shake up planning laws. Some experts are also using construction growth to highlight that the UK is recovering from its recession period. This represents a prime investment opportunity for investors and contractors, says André Redinger, Antipodean Holdings.
New government; new opportunities
Newly-elected Prime Minister, Keir Starmer, has repeatedly promised that his government will be for ‘the builders, the not blockers’, referencing issues in the UK planning system. To combat ongoing issues, The Planning and Infrastructure bill pledges to ‘turbocharge the building of houses and infrastructure’. The driving force behind these plans is to remove red tape and facilitate more investment and building within the UK.
For those looking to invest into UK construction sectors, the new government presents a number of opportunities and contracts. To give the private sector certainty on the project timeline, the new government has pledged to develop a 10-year infrastructure strategy in which it lays out key milestones and focus areas. Specific targets will include: potholes on roads, environmental resilience, industrial strategy and clean energy. For private contractors with expertise in any of these sectors, there could not be a better time to put the UK into strategic focus.
Getting ahead
Companies vying for government contracts must align with Labour’s objectives to stand a strong chance of being selected. These companies must be reputationally robust, mission-driven and with strong leadership. A strong portfolio is also essential to showcase previous work and the know-how to complete the vital projects to an exceptional standard.
Another critical consideration for government contractors is environmental credentials. Net zero is another key Labour policy, so any contractors need watertight sustainability practices. The best companies in this space currently minimise the use of non-renewable energy, create healthy environments and use environmentally preferable materials, among other actions.
Therefore, companies which offer the most robust sustainability practices put themselves at a practical advantage. The same applies to private contracts, which are increasingly focused on sustainability.
In addition to sustainability, UK job creation is another key factor in the selection of government contracts. This is driven by the new government’s plans to kickstart economic growth through stable jobs. Leading construction firms can play their part by working with investors who care about the long-term viability of the sector and growing jobs within it. By investing in people and skills, the construction sector will set itself up for future success. As the industry flourishes, this will protect existing jobs and create new opportunities.
Beyond business
More than a business opportunity, investment into the construction sector offers the opportunity to solve real social issues in the UK. Of these issues, none is more pressing than the housing crisis. Housing in the UK costs almost 50% than expected in comparison to other goods and services in the country, with rents recently soaring to record highs. This has led to a 52% increase in rough sleeping between 2010 and 2020. As a result, those investing into and building the 1.5 million homes pledged by Labour, are delivering solutions to thousands in need.
Growth with the right backing
Companies in the sector that want to take advantage of these favourable conditions may need outside investment to fund their growth pushes. Those companies must be careful and deliberate with the investors they choose. Rather than simply looking for the investor with the deepest pockets, they should aim to work with investors who have their long-term interests at heart.
That means choosing an investor which is committed to growing the company while keeping jobs safe. But it also means choosing an investors that understands the importance of using construction to meet a nation’s most pressing needs in as sustainable a way as possible.
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