The global economy is facing years of uncertainty. The UN has warned of a lost decade as the scarring effects on the economy of covid-19 are worked through. Investors, government and the public sector need to come together to tackle this economic fallout. And there are few easier ways to kick-start economic growth than construction and house-building.
Construction’s economic importance cannot be downplayed. In the UK, it contributes £118bn (6% of overall GNP) and employs one in five either directly or indirectly through its vast supply chain. A flourishing construction sector would help government refill the coffers, starting to meet the bill for the extraordinary fiscal measures implemented to tackle covid-19.
An area of construction that perhaps warrants the most immediate attention is house-building. As a sector, it supports nearly 700,000 jobs and is worth around £38bn to the UK economy each year. And with 1.3 million remaining on housing waiting lists, it remains vastly underserved. But following the challenges of the covid crisis – with a nation navigating lockdowns, ever-increasing demands to work from home or job losses – affordability and supply issues have come to the fore.
As is being seen in other developed markets, the UK government has already announced some stimulus packages. These include ambitious planning reforms, proposals to deliver 75,000 modular homes each year and a short-term stamp duty cut. While forming the spine of government’s recovery plans, it is important that these fully unlock investor and private sector roles in helping us build our way out of this crisis.