UK construction ‘starting to crack’, says CPA

A new report by Oxford Economics for the UK’s Construction Plant-hire Association (CPA) warns that Britain’s £530 billion construction and infrastructure pipeline is “starting to crack”, with skills shortages, falling investment and delivery delays threatening to derail government growth plans.

The report said Britain’s construction industry is stalling because of skills shortages, weak investment and chronic delivery delays, with flagship projects at risk of grinding to a halt.

It warns that “announcements are outpacing delivery capacity”, with too few projects fully costed or shovel-ready. It added that only 14% of major government projects are on track, and less than half the National Infrastructure Pipeline has confirmed costs or funding.

CPA said the rental industry had the capacity to invest and support construction but only if there was “stable policy and predictable pipelines.”

Steven Mulholland, CEO of the CPA, said: “This report is a call to action for ministers. Britain’s construction pipeline is cracking under the strain of unrealistic targets, uncertain funding and a shrinking workforce.

“Unless the Government restores confidence and fixes the fundamentals, the next decade will be defined by half-built promises and rising costs.

“The plant-hire sector is one of the most capital-intensive in the economy, with our members shouldering much of the investment risk needed to keep Britain building.

“With stable policy and predictable pipelines, we can channel private capital into public infrastructure without adding to national debt.

“If ministers match our willingness to invest with clarity and confidence, we can turn ambition into action and build the growth, jobs and prosperity Britain needs.”

CPA policy proposals

The CPA has submitted policy proposals to the UK government ahead of the upcoming Budget to “stabilise delivery and restore business confidence across the construction supply chain.” These include:

• Publish a costed update of the National Infrastructure Pipeline with funding beyond 2028.
• Reverse the rise in employer National Insurance, easing labour-cost pressures.
• Extend full expensing to leased assets, allowing hire firms to reinvest £1.3 billion a year.
• Maintain the current Fuel Duty rate, protecting SMEs hit by the loss of red-diesel relief.
• Retain Business Property Relief, preventing succession-related closures of family-run firms.
• Reform the Growth and Skills Levy to give employers flexibility and fund SME apprenticeships.

Productivity falling behind Europe

According to Oxford Economics, UK construction productivity has fallen consistently because investment in capital equipment and infrastructure has lagged behind other European economies, such as Germany and France, which have maintained stable capital pipelines and seen sustained productivity growth.

Among the strains facing the UK’s construction sector, said Oxford Economics, is the need for 250,000 additional construction workers to deliver planned projects, with nearly half a million workers due to retire in the next 15 years.

It said pay for young workers in construction has fallen below wage rates in the retail sector, while construction productivity has declined 0.1% a year since 1997, leaving output per worker below 1990s levels.

CPA is making the report widely available. See the CPA website or download using the link below.