CJ Construction Blog

The Government's plan to spend us back into recovery has proved a quick way to grab positive headlines. The important question, though, is whether it will be as swift in stimulating new construction work?

Investing in infrastructure to create jobs and restore business confidence is an excellent way of avoiding the damage caused by falling tax receipts and soaring unemployment costs during a recession.

At this stage, any investment measure is a welcome shot in the arm for an industry feeling it is coming down with something more serious with every passing day.

But Alistair Darling's plan to jump from a sub-prime crisis to pump prime solution is very short on detail. We are told each spending department will set out its plans in good time.
This is not good enough because time - or lack of it to be precise - is the crux of the matter. Like the banking crisis, the big issue is deteriorating confidence. The government earned praise for rapid intervention with the banks; it would do well to show similar haste with construction.

What needs to be recognised is that contractors are coming under extreme pressure to reduce bids from clients arguing that a recession heralds cheaper construction. This is not the case, as anybody watching bitumen and labour prices can see.

Pressure for cut-throat bids must be resisted if serious trouble is to be avoided in the future. In this respect, Darling's plan will help the industry to hold its nerve. But will it deliver any more?