The campaigns for all of the parties involved in the general election, which is taking place on 8th June, are now starting to gather steam, having had time to regroup following the surprise announcement that the election would be held now, rather than in 2020.
As we enter May, industries and economists have also had time to analyse what the potential impact of this election and the run up to it could be. The construction industry is one that is already feeling the uncertainty introduced by Brexit, but will the summer election introduce further challenges?
Work on the ground
Because of the sudden nature of the election announcement, industry experts believe that it won't have a lot of impact on projects that are already in progress. Work taking place on the ground on both public sector and private construction projects is typically based on contracts that were agreed months previously, and so the upcoming summer season shouldn't see a noticeable increase or decrease in work in the building sphere as a result of there being an election, or even a potential change in government.
Decisions May stall
However, a lot of projects that have not reached the stages where contracts can be signed yet may well be stalled by the run up to the election. This is because investors may think it prudent to wait until a result is known and the potential effects on the economy (for instance on the price of the pound) have begun to be shown before making decisions and setting budgets. Construction finance can be heavily impacted by the financial markets, due to changes in the cost of materials, and of course, demand for new projects may change in line with any new policies directed at the housing market, or at infrastructure.
This effectively means that while the election won't cause an immediate slowdown on work that has already received the green light, getting projects up and running during the coming weeks will be difficult as decision makers wait out the clearer conditions that usually follow an election.
Brexit challenges set to continue
The industry has, in many ways, become accustomed to the level of uncertainty an election can introduce. This is the fourth year in a row where there has been an important vote, with the Scottish independence referendum, the 2015 general election, and the Brexit vote all having come before. One thing that this election doesn't seem set to change is the progress towards Brexit, with both Labour and the Conservatives showing no plans to hold a second referendum or reverse the triggering of Article 50.
In construction, Brexit as a concept has introduced some major challenges in terms of economics and labour, which can't really be resolved until trade negotiations and discussions on future conditions for EU workers in the UK are progressed. Political analysts don't seem to think the election should halt current progress on further defining Brexit, so in the short term at least, it shouldn't make things any more unclear than they already are.
It is hard to say how construction will be affected in the medium to long term by the outcomes of current political events, however it seems the industry is likely to cope well during the election run-up.
Ben Barlow is UMS Content – freelance financial writer.