BLP Insurance reacts to the latest PMI and Autumn Statement

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PMI
Image credit: BLP Insurance

Following the release of the latest PMI figures, Phil Harris, Director at BLP Insurance says there is “shoots of optimism, but serious sector-wide problems persist”

Mr Harris said that although the figures from the latest PMI and Autumn Statement demonstrated a rise in production, the long-term picture paints a different story and will “rely on new contracts being placed at short notice”.

He added: “Brexit uncertainty retains its vice-like grip on the industry, despite cautious growth in the commercial sector.

“Demand in the residential sector remains buoyant, but exactly how to deliver truly ‘affordable housing’ remains a riddle.”

The Chancellor of the Exchequer, Phillip Hammond released the pre-Brexit Budget on Monday which signaled successes for the future of the construction industry.

Commenting on the Autumn Statement, Mr Harris said: “Monday’s Autumn Statement did, however, provide some green shoots of optimism.

“The increased allocation to the Housing Infrastructure Fund (HIF) and extension of the abolition of stamp duty to first time buyers purchasing shared ownership properties signalled that positive momentum may be on the horizon.

“Additionally, the move to halve the co-investment rate for apprenticeship training to 5% could begin to address the sector’s growing skill shortage.

Mr Harris went on to discuss the impact that dropping PF1 and PF2 contracts will have on the sector.

“Nonetheless, many problems persist. The decision to cease administering new PFI and PF2 contracts is concerning as the system, although by no means perfect, has previously allowed the government to invest in construction independent of public sector expenses, and this will not easily be replaced” he added.

He then shared his views on new government plans to streamline property conversions.

“The Government’s plan to streamline the conversion of commercial property to residential property also requires further clarification in terms of build quality, given that the construction standards of these property types differ significantly.

This is particularly pressing following the Office for Budgetary Responsibility’s indication that one of the government’s most publicised policies, to increase funding to councils for the construction of social housing, could ultimately result in a mere 1,500 new homes being built each year – hardly a significant contribution towards the government’s overall housing targets.”

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