COVID-19 recovery must be protected with trade agreement

COVID-19 recovery must be protected with trade agreement

BLOG · BY TTF CEO, DAVID HOPKINS · 12 November

The Q3 Construction Trade Survey from the CPA showed a marked improvement over Q2, where lockdown measures led to one of the worst quarters in history for sales of construction products and materials, but the recovery is precarious and must be fully supported by Government in the form of a comprehensive trade agreement with the EU.

Q3 did see increases in construction output by 17.2% in July and 3.0% in August, but emphasizing the challenge still ahead, output in August remained 10.8% below February’s pre-coronavirus levels.

Private housing and RM&I were reported by SME contractors as driving the increase in business, while chartered surveyors reported weakness in most sectors, with workloads reported to have fallen in Q3 in commercial, public non-housing and industrial.

The recovery is precarious and must be fully supported by Government. At the risk of sounding like a broken record, the best way they could do this now is be securing a comprehensive trade agreement with the EU, which again seems to be going to the wire.

Some of the risks are already apparent in this survey, with materials widely reported as the key driver of cost inflation. On balance, 56% of heavy side and 60% of light side firms reported that raw materials costs rose over the past year. Exchange rates were also cited as another key driver.

Both of these costs are likely to be amplified by Brexit. The UK relies on importing much of its raw goods and materials, including timber, from other countries around the world. A plummeting pound from a market wary of a ‘no-deal’ Brexit will not help our recovery.

The Government also appears to be pushing ahead with the Internal Market Bill despite its heavy rejection from the House of Lords and the arrival of a Biden presidency, who has already expressed concerns about what it may mean for the Good Friday agreement.

Regardless of the decisions of Government, and whether we arrive at a deal or no-deal, or whichever terminology you prefer, Australian or otherwise, it will be important all UK businesses prepare, and give confidence to our partners around the world.

This week our Hardwood members can engage with some of our joint partners in Asia and Africa in our TTF Tropical Timber Market Webinar on Thursday 12 November, followed by our TTF Hardwood Market Webinar on the EU and America on Wednesday 18 November.

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