Viki Bell, Chief Executive of the Construction Equipment Association (CEA), said:
“While today’s Budget maintains investment in some key areas, it offers little direct reassurance for the construction equipment industry. The sector was barely referenced in the Chancellor’s speech, despite its central role in supporting growth, infrastructure delivery and UK manufacturing.
Rising costs remain a major concern. The increase in the National Minimum Wage, alongside the extended freeze on income tax and National Insurance thresholds until 2031, will raise employment costs and reduce disposable income at a time when many SMEs are already under pressure. Freezing fuel duty offers some relief, but the new mileage charges for hybrid and electric vehicles will add costs elsewhere in the supply chain.
Although funding for apprenticeships and skills is welcome, the lack of wider action on housebuilding or planning reform is a missed opportunity. With activity already subdued, the absence of targeted support for the housing market leaves a significant gap for the construction sector.
We are also concerned that support to cut electricity prices for manufacturing will not begin until 2027. Energy costs are impacting UK manufacturers now, and delaying action risks weakening competitiveness and discouraging investment in new equipment.
The Chancellor confirmed the continuation of full expensing and introduced a new first-year allowance. While full expensing still excludes assets made available for hire, the new 40% first-year allowance will apply to most assets purchased for leasing, which is a step forward for the hire side of our sector.
Major infrastructure schemes were referenced, but today’s strict fiscal rules mean delivery is far from guaranteed. What our sector needs is certainty. The construction equipment industry continues to face rising input costs and a slowing market, yet the Budget leaves many key questions unanswered.
We are now working through the detailed Budget tables and will provide members with a full report in the coming days.”
Professor Andy Angus, Economist to the CEA, and Cranfield University, added:
“Today’s Budget delivered £26 billion of tax rises and takes the UK tax burden to new highs by 2030–31. Given the vital role construction will play in driving economic growth, it was surprising how little the sector was mentioned in the Chancellor’s speech. There was no reference to planning reform and no new commitments on major infrastructure delivery.
The extension of the income tax and National Insurance threshold freeze means millions more workers will move into higher tax bands as wages rise, reducing disposable income. At the same time, the increase in the National Living Wage raises input costs for firms across the construction supply chain. These pressures come at a time when many contractors and SMEs are already operating on tight margins.
This must be balanced against increased funding for apprenticeships and skills for young people, and the freeze on fuel duty, which will provide some relief. But with new charges on hybrid and electric vehicles, and no targeted measures to stimulate housebuilding, the challenges facing the sector remain significant.
While much of the country may feel relieved to have clarity from the Budget, the construction sector is still waiting for the long-term signals and certainty needed to support sustained growth.”