Construction industry in buoyant mood on infrastructure over the next year, but concern that not enough is being done to meet UK needs over the longer term
Industry acknowledges role for greater supply chain collaboration to meet challenges
Greater support for local road and rail, over major infrastructure projects
Regional disparity with most infrastructure spending in London and the South East compared to rest of UK
As the UK embarks on some of its biggest infrastructure projects, including HS2 and a £15 billion road building programme, senior business leaders from the construction industry are in a buoyant mood regarding the UK’s infrastructure outlook.
According to the Infrastructure Outlook Report, based on research from Ipsos Mori and commissioned by Tarmac - the UK’s leading sustainable building materials and construction solutions company - two thirds (68%) of respondents are confident about the UK’s overall infrastructure outlook over the next 12 months. However, two thirds (66%) of those surveyed agree that not enough is being done to meet the UK’s infrastructure requirements.
“It’s great to see that the construction industry is in a confident mood, but there is no room for complacency. Challenges remain in meeting the UK’s infrastructure requirements and there is concern about delivery in the years ahead. However, the industry signals a clear intent to work more collaboratively with all parties to deliver a step change in infrastructure for the UK,” said Cyrille Ragoucy, Tarmac’s chief executive.
The construction industry is calling for a range of measures to help improve the UK’s infrastructure, including cutting red tape (83%), increasing government investment (73%), giving greater certainty on government spend (71%), and unlocking private investment (70%).
Over three quarters (77%) of those respondents who think the government should spend more on new economic infrastructure projects in the next five years believe that the private sector should lead funding for new economic infrastructure projects. This is more than double the levels thinking other sources should be involved, such as Government borrowing (37%), sovereign wealth funds (32%) or increased taxation (31%).
These findings highlight the private sector’s critical role in plugging the infrastructure funding gap and in helping to tackle the UK’s historic under investment. Tarmac’s survey confirms that more agree (48%) than disagree (26%) that most other European countries, especially Germany and France, are ahead of the UK in terms of investment and development of both economic and social infrastructure. Even more agree (64%) than disagree (14%) that China and other leading global markets, the USA in particular, are ahead of the UK in infrastructure investment and development.
Nearly four-fifths (78%) of survey participants also agree that the time taken for infrastructure projects could be reduced if there was greater collaboration across supply chains.Such collaboration - public and private - could be facilitated via a Department for Infrastructure, with a clear majority (72%) supporting the creation of such a department.
In other findings, there is a greater overall level of support for the maintenance of local roads and upgrading the strategic road network (motorways and A-roads) outside London as transport infrastructure projects, than for HS2, HS3, Crossrail 2 or adding runways at either Heathrow or Gatwick.
Regionally, there is a clear disparity between London and the South East versus the rest: 72% of survey participants first mention London (51%) or the South East (21%) as the regions that will see the most being spent on infrastructure projects in 2016. This compares to very few first mentions for other regions in the UK, with the North West appearing next with 5% followed by Scotland (4%), South West (3%), the West Midlands (3%) and the North East (2%). Yorkshire & Humberside and East Anglia are mentioned first only by 1% and none mentioned the East Midlands, Wales and Northern Ireland first.
Similarly, two-thirds believe that London (50%) and the South East (16%) benefit the most from current and confirmed future government infrastructure spend. This compares to only 4% for the North West and 3% for both Scotland and the North East, and 2% for the West Midlands. East Anglia, Northern Ireland and Yorkshire & Humberside feature at the bottom, with none of those surveyed thinking they will benefit the most.
Against a backdrop of efforts to improve regional imbalances and spur local growth, there is strong support for local government being able to decide about infrastructure projects locally. 72% agree with this, with only 6% strongly disagreeing. Furthermore, three in five (61%) are confident that devolution of local government will help in the delivery of local infrastructure projects.
For the full report, please visit: /infrastructure-report/
About the research
The research was conducted by Ipsos Mori via telephone interviews with 300 senior decision makers in construction companies and their clients between 8July and 12 August 2015, prior to the creation of a National Infrastructure Commission. The sample was drawn from the Dun & Bradstreet business database. Quotas were set to obtain 100 interviews with decision makers in civil engineering companies/organisations/clients and 200 in construction companies (for commercial and domestic buildings). The companies/organisations included in the survey all have between 10 and 1,000+ UK employees but the data is unweighted, eg by company size or building/construction sector.