Rich Ricci hosts Construction sector lunch at Vintners Hall
Rich Ricci, CEO Panmure Gordon hosted a successful Construction sector lunch last week at Vintners Hall in the City. The event was attended by senior representatives from leading corporates and institutional investors across the sector. Simon French, Chief Economist of Panmure Gordon addressed the lunch focusing on key macroeconomic themes impacting the construction industry as highlighted below:
- Structural Growth in UK construction (a long held view of Adrian and mine). An era of capital deepening due to the coalition of political will and the reversal of three decades when the UK has had a rather capital-light model.
- Inflation vs Step Level change in prices. Explore the long term drivers of inflation (market power) and whether this has returned for a broad range of workers and suppliers (70s/80s) – or whether the pandemic has bequeathed temporary pricing power that will dissipate as COVID becomes endemic.
- Resilient Household incomes. These have been protected like never before (furlough/ grants/ VAT cuts/forbearance). This makes for a highly unusual economic recovery with low unemployment, high vacancies, loose financial conditions and thin inventory.
- There has been a change in utility accorded by the built space (and this has been backed up by spending patterns). This is likely to prove persistent as suppliers have a wealth of new data to profile customers – and there is a “sunk investment” in home working that workers will be reluctant to write off.
This event is the first of a series of sector events Panmure Gordon will be hosting in the coming months.