richard diment federation of master builders – uk ebc congress 2009

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Richard Diment Federation of Master Builders – UK EBC Congress 2009

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Richard Diment Federation of Master Builders – UK EBC Congress 2009. Content. Overview of the impact on the construction sector in the UK FMB’s proposals What has the UK government done so far What is likely to happen next. UK GDP 2004-2009. Impact on the construction industry in the UK. - PowerPoint PPT Presentation

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Page 1: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Richard DimentFederation of Master Builders – UK

EBC Congress 2009

Page 2: Richard Diment Federation of Master Builders – UK EBC Congress 2009

ContentOverview of the impact on the construction sector in the UK

FMB’s proposalsWhat has the UK government done so far

What is likely to happen next

Page 3: Richard Diment Federation of Master Builders – UK EBC Congress 2009
Page 4: Richard Diment Federation of Master Builders – UK EBC Congress 2009
Page 5: Richard Diment Federation of Master Builders – UK EBC Congress 2009
Page 6: Richard Diment Federation of Master Builders – UK EBC Congress 2009

The views of FMB members

Page 7: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Other key economic indicators in the UKReturn to pre-recession activity levels in

construction sector not expected until 2013Inflation low (CPI currently 2.3% - 0% by year end

– rising to 1~2% by 2012)Public expenditure deficit unsustainably high

(forecast at £175bn – 12.5% of GDP - for 2009/10)Public sector deficit likely until 2017Central bank base rate 0.5% (down from 5% in mid-

2008) – lowest rate since central bank set up in 1694!

House prices down by about 20% in 18 months – 1 in 9 householders estimated to be in negative equity

Page 8: Richard Diment Federation of Master Builders – UK EBC Congress 2009

The industry’s responseCross industry alliance of 30

Trade Associations , Material Suppliers and Trade Unions

Clear message to all politicians that unless they act quickly, thousands of companies and tens of thousands of jobs will be lost

Industry will not be in a position to tackle the UK’s building needs when recovery comes

Page 9: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Our 10 Point Plan/1Get the banks lending to responsible

borrowersCut VAT to 5% for all building repair and

maintenance workProduce a coherent plan for modernising the

existing housing stockTargets for local authorities to release land

for social housingSimplify the planning process

Page 10: Richard Diment Federation of Master Builders – UK EBC Congress 2009

10 point plan/2An implementation plan for school, hospital

and prison upgrading in 2009-10S206 agreement holiday - Abandon

Community Infrastructure LevyReduce the regulatory burden. Make it easier

for SMEs to win public contracts.Reform stamp dutyReintroduce empty property rate relief

Page 11: Richard Diment Federation of Master Builders – UK EBC Congress 2009

The scope for sustainable refurbishment21m (out of 25m existing homes) likely to still

be in use in 2050Few of them are environmentally efficientNeed to reduce emissions of those existing

homes by around 75% Similar work needed on non-housing building stock

Page 12: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Other immediate problemsSocialLengthy and growing social housing waiting

listsMillions in fuel poverty and/or living in sub-

standard homesAn industry in crisisBiggest downturn for building in 80 yrsThousands of jobs at riskTraining in freefallReal fears about future capacity

Page 13: Richard Diment Federation of Master Builders – UK EBC Congress 2009

A win-win-win situationImprove environmental performance of

existing stock to meet carbon targetImprove the housing conditions of millions

and reduce fuel povertyGet Britain Building againGive Britain’s builders – and the next

generation – the skills to make our buildings sustainable

Page 14: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Building a Greener BritainA whole new marketModernise the

existing building stock

Up to £6bn a yearAudit of propertyKnowledgeable

buildersIntelligent customersFinancial incentives

Page 15: Richard Diment Federation of Master Builders – UK EBC Congress 2009

What has the UK Government done?Slow to react – very little construction sector

specificPriority has been to stabilise the financial sectorInterest rates at 300yr + lowFiscal stimulusPurchased a major share in several big banksReduced VAT from 17.5% to 15% from 1 Dec

2008 to 31 Dec 2009Quantitative easing – up to £150bn agreed for

asset purchasing - £125bn used to dateSupport for SMEs to defer tax bills

Page 16: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Sector specific initiativesBrought forward some public expenditure –

social housing, schools & hospital building into 2009-10 – but no additional money over 2008/09-2010/11

Some extra money (£100m) in funding for improvements to social housing

£500m to support restarting work on ‘mothballed’ house building sites

Extended ‘stamp duty’ holidayChanges to permitted development rightsCommitment (by 2030) to improving housing

stock – no new money as yet

Page 17: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Prospects for the building sectorRecovery will come – best guess recovery to 2007 levels

by about 2013Massive housing crisis – both quality + quantityCommitment to upgrade the building stock 2013-2030Urgent need for infrastructure improvements – but SME

builders don’t usually have civil engineering skillsUK must have GE by June ‘10 – change of Govt likelyRisks – need to reduce public expenditure deficit– less

state money available + higher personal/business taxesIf inflation rises – what will happen to interest rates?

Page 18: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Recession is expected to end by late ‘09/early ‘10 but recovery to pre-recession levels unlikely before late 2011

Page 19: Richard Diment Federation of Master Builders – UK EBC Congress 2009

The nightmare to be avoided

Page 20: Richard Diment Federation of Master Builders – UK EBC Congress 2009

Thank you

Any questions?