Professor Noble Francis, Economics Director, Construction Products Association will be presenting a special webinar on “The Economic Landscape” on 29th September at 2pm via video-link for Members’ Week.
The webinar will provide an overview of the economy, the drivers and the political backdrop as well as outlining some of the potential scenarios that could be ahead as we enter even more challenging times in 2021. The online presentation will be followed by a Q&A as Professor Francis invites questions on the economy from GGF Members.
In this exclusive GLASSi interview Professor Francis provides a background to his career in economics and a preview of his presentation.
When and how did you start working on the economic analysis for the construction sector?
After my PhD, which was on the economics of the English Land Market, over 20 years ago now, I started doing forecasts for the UK economy in the economic modelling team at Experian.
The construction team there needed some help setting up some models to do employment forecasts in the construction industry for CITB (Construction Industry Training Board) and construction inflation forecasts for government.
Since then I haven’t stopped doing construction research. Back then I focused mainly on the contracting side of the industry but once I moved to the CPA (Construction Products Association) in 2008 I learned to take a broader view of the whole construction supply chain and I have been focusing on construction forecasts, issues around the major contractor business model and the impacts of these issues on SMEs lower in the supply chain.
What are the main obstacles in making accurate forecasts for the UK economy and the construction industry?
The two main obstacles are the impacts of government policies and uncertainties. This year, government has had a constant stream of announcements affecting the economy and, in particular, the construction industry. However, working out to what extent these are re-announcements or merely allocations of existing finance is increasingly difficult.
Plus, government’s poor record of policy implementation in construction over the years, whether it is CERT, the Green Deal or Feed-in Tariffs, makes it very difficult to take account of the possible impacts of any new major policy announcement.
In terms of uncertainties, we have our early indicators that imply how the economy and each construction sector are going to fare but the key question is how relevant are they in abnormal circumstances, whether it is a global pandemic, the sharpest recession on record but with unprecedented government stimulus or the end of the Brexit implementation period? The impact of these significant background factors are unpredictable to say the least.
How quickly do you think the global economy can recover from the COVID pandemic? And what are the main areas of concern?
The initial part of the recovery in June and Q3 will be quick as we are coming from such a low point after easing social distancing restrictions and re-opening the economy. After this growth rates are likely to slow but we are still likely to continue to recover.
The key issues are likely to be based around potential second waves or significant spikes of COVID-19, the end of the furlough scheme and the end of the Brexit implementation Transition Period. If we face a second wave of COVID-19 when the cold weather comes in winter alongside flu, and so face further social distancing and other restrictions, then we may see economic recovery come to a grinding halt.
Economic activity in this case would be unlikely to return to April’s low levels as there’s a degree of learning and business continuity but it would lead to a second dip in GDP. However, government would want to avoid lockdown restrictions again at the national level even with a second wave.
The end of the furloughing scheme in October, assuming that it is not extended into 2021 as it has been in France and Germany, will lead to a sharp rise in unemployment and this is likely to impact upon demand in the wider economy.
Job losses are likely to impact on the services sector, particularly where it involves person-to-person interaction or is tourism related. It is also likely to impact on central London given the high cost of commercial offices, retail and residential space, especially with a considerable proportion of people that work in London but living outside the capital working from home.
What can GGF Members expect from the webinar on The Economic Landscape at Members’ Week?
From my presentation at Members’ Week, I hope GGF Members will gain some insights and potential scenarios for the UK economy, that may help with their plans for the challenging times ahead.
The Economic Landscape webinar for GGF Members’ Week, is scheduled for 2pm to 3.15pm on 29th September. To book your place at this webinar click the banner below