Строительство в экономике Великобритании - преимущества инвестиций

construction output include

manufacturing (especially of building

products and equipment), real estate,

business services (including

architecture, planning and surveying),

mining and quarrying, and

transportation

Induced impact

Increase in household income as a

result of increased employment /

income in construction and other

sectors leads to increase in spending

and demand / output in the overall

economy

Direct impact

Wage income and corporate profit

generated in the construction sector,

plus spend on non-labour inputs

£2.84

£1 spent on construction output generates a total of £2.84 in total economic

activity (i.e. GDP increase)

Impact on economic activityUK Contractors Group.  Construction in the UK economy. 11

In addition to the economic benefits, every £1 invested in construction provides

financial returns to the Treasury in tax income and benefit savings

Note: For new buildings (the tax and benefits effects are c. 1p higher for renewals and maintenance); * Not included in total; ** Excludes benefit allowance

savings; Indirect tax effects have been calculated by multiplying the additional tax earnings for each sector from spending £1 by their contribution to the

indirect impacts of construction (i.e., the £1.09 of the construction type I multiplier); The induced effect has been calculated by multiplying the median

additional tax earnings from £1 investment in sector output by the induced output effect associated with £1 investment in construction

Source: ONS; Oxford Economics; L.E.K. analysis

Benefits 0.23

0.56

Total tax from induced effects 0.08**

Total tax income and benefits

savings to the Treasury

Direct effect

0.12**

0.36

£

Estimated returns to the Treasury

from investing £1 in construction

Total tax from indirect effects

Corporation tax 0.01

0 - 0.02*

0.12

Total direct tax and benefits savings

Stamp duty

Income tax and NI

Taking into account direct, indirect and induced tax

effects allows us to estimate the net financial costs to the

Treasury from spending £1 supporting the construction

industry

These estimates assume that increased demand in the

economy would reduce current unemployment which is

likely to be the case at current levels of depressed

economic output

Impact on economic activityUK Contractors Group.  Construction in the UK economy. 12

Note: Sectors selected are ones for which the government is a major provider (e.g. education) or ones which have received or are likely to receive

significant government support (e.g. banking and finance); * Local or Central Government industry sectors, which have different production

assumptions than market sectors

Source: ONS (1995 – the last time the analysis was undertaken; published in 2002)

In the short term, construction is one of the most effective sectors in which the

government could invest to stimulate economic activity

1.0 1.2 1.4 1.6 1.8 2.0 2.2

Postal and courier services

Public administration and defence*

Education*

Forestry

Social work activities*

Banking and finance

Shipbuilding and repair

Motor vehicles

Agriculture

Construction

Health and veterinary services*

Railway transport

UK type I output multipliers by selected sectors

£1 of output by construction generates demand for the

supply of products and materials used in the construction

process, as well as demand for professional services

The type I output multiplier is a measure of the direct and

indirect effects associated with an additional £1 spend on

a particular sector. The ONS estimates the construction

output multiplier at 2.09

- sectors that benefit from increased construction

output include manufacturing (especially of

building products and equipment), real estate,

business services (including architecture,

planning and surveying), mining and quarrying

and transportation

In addition, the wealth generated in these sectors induces

further, broader beneficial impact on the wider economy

(not captured in the type I multiplier)

Construction has one of the highest output multipliers

among sectors that are candidates for government

support. This makes it one of the most effective ways of

stimulating the overall economy

2.09

Multiplier

Impact on economic activityUK Contractors Group.  Construction in the UK economy. 13

Note: Construction is defined as SIC code 45 and excludes construction products and business services, e.g., architecture and surveying

Source: ONS; L.E.K. analysis

Compared to other sectors, construction relies little on imports; hence,

investment in construction is more likely than other sectors to generate additional

economic activity within the UK

Imports as a percentage of intermediate consumption

(2007)

The construction industry typically imports a

very low proportion of intermediate

consumption, much lower than that many

other industries

- in 2007 construction imported less

than 8% of its supply, while UK

manufactured motor vehicles

imported nearly 28%

The low proportion of imports in the

construction industry means that for every

pound invested in construction, nearly all of

it will be retained in the UK

- for other industries, with a high

percentage of imports (e.g., the motor

manufacturing industry), a much

higher proportion of any government

support will be “leaked” abroad

Average for all

industries

0

5

10

15

20

25

30

Motor vehicles Shipbuilding Healthcare C Education onstruction

Percent

UK manufactured

Impact on economic activityUK Contractors Group.  Construction in the UK economy. 14

(8)

(6)

(4)

(2)

0

2

4

1Q 2002

1Q 2003

1Q 2004

1Q 2005

1Q 2006

1Q 2007

1Q 2008

1Q 2009

(4)

(3)

(2)

(1)

0

1

2

Construction output quarterly

percentage change

GDP quarterly

percentage change GDP

Construction

output

Construction output and GDP quarterly

percentage change*

(1Q 2002-2Q 09)

The decline in private construction activity since the onset

of the current economic downturn has led to reductions in

GDP and employment

“… The sharp fall in the UK economy is being blamed

primarily on the construction and manufacturing sectors.

Construction output fell by 6.9% over the quarter,

compared with the fall of 5% in the previous quarter.

Output in the service sector also fell by 1.6% …”

ICM, June 2009

“… Around half the [GDP] revision in the latest quarter is a

result of new construction output data …”

ONS, 1Q2009

“… Employers in the construction sector were most likely to

be operating either a partial or organisation-wide

recruitment freeze (81%) … Over half (54%) of

construction companies are putting graduate recruitment

on hold, as the sector reacts to declining demand for new

build projects  …”

CBI, June 2009

“… Construction employment began to fall in 2008 with a

decline of 1% over the year, however, the CSN forecasts

a much larger drop of 15% across 2009 to 2010, with the

largest losses (around 13%) expected in 2009. The total

number of construction job losses from 2009 to 2010

could be up to 450,000 if output contracts by the

suggested higher rate of 12% in 2009  …”

Construction Skills Network, July 2009

Private construction output is very sensitive to changes in GDP; private activity

has contracted sharply in the current downturn, causing reductions in GDP and

employment

Note: * 2005 prices; Seasonally adjusted; Includes repair and maintenance

Source: 2009 Work patterns in the recession report, CBI; Institute of Commercial Management; 1Q2009 National Accounts briefing note, ONS

Impact on economic activityUK Contractors Group.  Construction in the UK economy. 15

Private sector construction spend is falling faster than in previous recessions;

CVAs, receiverships and bankruptcies in the construction sector have increased

since the onset of the current recession

Number of quarters from technical start of recession

Private construction output during recessions

Current recession

Early 1990s recession

Early 1980s recession

Note: * Construction only; Infrastructure is attributed solely to public after 1Q1980; Early 1980s recession excludes housing; Nominal prices

Source: ONS; BERR; Registry Trust; Insolvency Agency; L.E.K. analysis

0

20

40

60

80

100

Number of companies

Q1

50

Q2

57

Q3

68

Q4

97

Q1E

44

Q4

25

Q3

22

Receiverships

CVAs

Company voluntary arrangements and receivership appointments*

(3Q 2007-1QE 09)

2007 2008 2009

0

150

300

450

600

750

Number of people

Q3 Q4 Q1 Q2 Q3 Q4 Q1

Bankruptcies amongst self-employed*

(3Q 2007-1QE 09, not seasonally adjusted)

2007 2008 2009

40

60

80

100

120

140

(4) 8

Index

(12) (8) 0 4 12 16

Private output is

falling at a faster

rate than in

previous

recessions

Impact on economic activityUK Contractors Group.  Construction in the UK economy. 16

0

1

2

3

4

4Q 2007

1Q 2008

2Q 2008

3Q 2008

4Q 2008

1Q 2009

2Q 2009

The construction sector has had the greatest increase in redundancy rate in the

UK since the start of the current recession

Redundancy rate (per 100)

Construction

PPT change in

redundancy rate

(Q42007-Q209)

2.2

Note: * No data available for certain quarters when sample sizes are too small to provide estimates; Not seasonally adjusted

Source: ONS; Financial Times

UK redundancies by industry

(1Q 2007-2Q 09)

Manufacturing

Financial intermediation and

business services

Distribution, hotels and restaurants

Transport and communications

1.2

1.2

0.5

n/a*

UK total 0.1

The construction sector has had the

highest redundancy rate in the UK

(c. 28 per 1,000 employees) since

the start of the current recession

- construction's redundancy rate is

c.40% greater than manufacturing

and c.50% greater than financial

intermediation and business services

“… The construction industry has endured a

prolonged period of discomfort, as a

sharp slowdown in house building and a

drying up of new commercial building

projects has caused an estimated 16 per

cent decline in output during this year,

making it the country’s leading source of

redundancies during the recession  …”

Financial Times,

10 September 2009

Public administration, education

and health

0.1

Impact on economic activityUK Contractors Group.  Construction in the UK economy. 17

Even if current government plans in construction are maintained, construction

output is expected to fall significantly over the next 2-3 years.  Any reduction in

public expenditure would exacerbate this problem

Note: * CAGR is for gross public expenditure only (excludes change in private output); Includes repair and maintenance work; All

infrastructure is accounted for in public expenditure; Current prices; Calculated using CPA growth rates and adjusted for inflation;

Source: ONS; CPA; HM Treasury; L.E.K. analysis

CPA (summer 2009)

forecasts large falls in

private construction

output 2009-13,

particularly in the offices,

retail, factories and

warehouse subsectors

CPA’s public construction

output forecasts are

based on government

budgets, adjusting for

government departments’

historical performance in

actual spend compared to

plan, and an industry

expert panel’s current

views on project and

funding status

Under this CPA forecast

scenario, construction will

suffer from a marked

decline in output levels in

spite of the assumed

relatively constant

government investment

0

20

40

60

80

100

120

140

1985 87 89 91 93 95 97 99 01 03 05 07 09F 11F

Total construction output and gross public expenditure

(1985-12F)

Billions of pounds

Public output

- CPA current

expectation

Private

output

6.4

CAGR%

(2002-08)

6.9

6.7

CAGR%

(2008-12F)

(4.4)

(1.5)

(6.1)

Total

Forecast

Gross public

expenditure

(plus private

output)

(3.4)*

Impact on economic activityUK Contractors Group.  Construction in the UK economy. 18

Construction is the best sector for stimulating employment

Contribution to employment

Construction employs c.8% of the UK workforce, and has been a major contributor to employment growth

Due to its labour intensity, additional spending on construction output can generate more employment opportunities

than other sectors that have recently received significant government support