The news this week shows that we are not out of the woods yet and that many uncertainties remain over how the next year will play out, in both the continued response to Covid, and the new Brexit rules. Both of these are disrupting supply chains but currently to an unknown degree as trade is suppressed.
As the new year lockdown was not factored into many forecasts, the Bank of England’s fresh forecast will be welcomed if only for some guidance on how the new measures have affected the economy. It is promising to see that a rapid recovery is in sight, but as ever this is conditional on a chain of events boosting household spending – there are significant concerns over what happens when government support is removed.
Calls for construction to support more direct labour should be welcomed. Schemes such as the Government’s Construction Playbook should go some way to enabling this, ensuring a steady and predictable pipeline of work, but we need to ensure that these projects are properly committed and funded.
To look out for
There are some important changes coming down the road for construction, especially the reverse charge VAT and IR35 changes, and with the current challenged market, all eyes will be on the Chancellor’s Budget at the beginning of March to see if any respite is given.