Posted by

Martin Smalley, Head of Transport & Infrastructure at Gleeds

20 Mar 2017

For anyone who operates within the construction industry, or is active in the political arena, you will know that the infrastructure sector is big on the agenda. In a time of political and economic change, it’s a sector that promises huge amounts of growth in the short to mid-term future; bolstering the UK economy and providing some sense of certainty in the industry.

The UK government has announced plans to invest between 1% and 1.2% of Gross Domestic Product (GDP) in infrastructure each year between 2020 and 2050 as part of the National Productivity Investment Fund (NPIF). This was reconfirmed in the recent Budget announcement and will help to fuel growth in the construction industry, which is responsible for approximately 6% of GDP. The economics behind it are simple - more construction means better infrastructure, increased accessibility to more business investment in local regions - equating to a stronger economy and a better future for the country.

While we wait to hear more about how the NPIF will operate in practice, there are already some major projects in the pipeline – particularly in the rail and energy sectors.

High Speed 2 is currently one of the most talked about infrastructure projects. With a 37 minute commute from Birmingham to London, we’re seeing investment in the commercial and residential sectors in the Midlands and North West. The expectation is that this will ease pressure on the South East housing bubble and create stronger regional economies across the UK.

Meanwhile, within the energy sector the UK Government is progressing with plans to build three new nuclear power stations; Hinkley Point C in Somerset, Horizon Nuclear Power on Anglesey, and NuGen at Moorside in Cumbria. Hinkley Point C will provide 3.2 GW of power and when fully operational, produce 7% of the UK’s electricity - powering over five million homes. During construction, this project alone will generate 25,000 new employment opportunities in the local area. Horizon Nuclear Power will produce at least 5,400 MW of new energy - enough to power around 10 million homes and save 14.58 million tonnes of CO2 emissions each year. It will create a workforce of between 8,000 – 10,000 people during peak periods of construction and has a requirement for 850 jobs for 60+ years of operation.

With greater job opportunities available in local areas, there is likely to be an influx of investment into housing, schools and leisure facilities. However, for this to become a reality, delivery is dependent on a skilled labour force and it’s no secret that the industry is already facing a skilled labour shortage - compounded by a lack of transparency over the immigration status of non-UK citizens from the EU.