The economy, Brexit, diversity, development opportunities and project funding were some of the big themes in day one of the CN Summit 2016.
Senior economists agreed that the biggest risk to the UK economy is the disintegration of the EU, with more market turmoil expected following elections in France and Germany, alongside further economic deterioration in Italy.
Graeme Leach, chief executive and chief economist at Macronomics, went as far as to say that a shift to a “united states of Europe” could happen by the early 2020s as more member states slip into economic difficulties.
The likelihood of a ‘soft Brexit’ scenario is also becoming increasingly unlikely. Jamie Dannhauser of Ruffer LLP and Mr Leach both agreed that a ‘hard Brexit’ scenario, with an exit from the single market, is the most likely outcome, driven by political will from EU member states.
Expect to see a mention of the roads sector in the Autumn Statement this year. There were hints that Highways England’s pipeline could be reorganised and some of the projects set to delivered in the second Roads Investment Strategy could be brought forward.
Good times for subcontractors: Keltbray CEO Brendan Kerr said his company is due to turn over nearly £400m this financial year, while FK Group chief executive Francis Keenan says that working internationally is paying dividends for his firm.
But Keller UK managing director Jim de Waele warned that main contractors would likely see prices going up due to the weak pound, with costs on materials imported from the EU rising significantly.
Keep an eye out for regeneration opportunities from transport and infrastructure projects. HS2 phase one programme director Mike Lyons said we need to recognise that these projects provide regeneration benefits for local areas.
Transport for West Midlands head of programme development Sandeep Shingadia also outlined the Midlands’ £8bn investment over 30 years in the region, including regeneration and housing projects.
In the North of England, more sources of funding will be needed to bring forward major investments. Transport for the North chief executive David Brown said his organisation has “had to accept that the days of 100 per cent Treasury-funded transport projects are gone”.
He emphasised the need for additional funding sources to help get infrastructure projects off the ground, and added that a “constant stop-start” approach to project planning had made it difficult to cost schemes accurately.
The UK is lagging behind on R&D investment and productivity compared with countries such as Japan, which is spending 20 per cent more.
The transport minister said government had historically neglected R&D but that partnerships with the private sector were crucial to rectifying this.