The PBR delivered yesterday was therefore the most important statement by a Chancellor for a long time.

This is a slowdown which is already causing real pain, but which also has longer term implications. On one hand, as the latest announcements in Inverness reinforce, companies are being forced to cut back investment and jobs now. On the other, a recent Highland Council meeting was told that housing infrastructure investment may not recover for many years. Debate on whether to target the response at the short-term, through tax cuts, or long-term, through infrastructure improvements, has dominated the run-up to the PBR.

Few would wish to open this red box. But in SCDI's view the circle can be squared. One of the best ways to reflate the economy now is focused tax cuts and support for infrastructure investment to get the construction industry moving and rebuild confidence.

So, prior to the PBR, SCDI wrote to the UK and Scottish governments with a 10-point plan. We proposed carefully targeted tax relief to encourage the private sector to buy homes to use for rent. We also called for the reduction of VAT on and the transfer of a £120m fund to Scotland for investment in the energy efficiency of the building stock.

Representatives at the council meeting agreed that there is a particular role for social housing. The Scottish Government has announced an acceleration of £100m spending, but we need to make sure that projects brought forward and Scottish construction firms can capture the value of this extra public investment. There is a clear case for higher grants to housing associations to increase their building programmes.

SCDI has participated in the work which is being taken forward by Highland Council and our national action plan and its action plan are closely aligned. We welcome its commitment to work with house-builders through the planning system to enable development. At this time it is right to consider whether action being taken elsewhere is also appropriate here.

For example, last week Glasgow City Council said that it will implement a "build now, pay later" scheme to encourage developers to start on site again.

Investment in transport, schools, colleges, universities and hospitals also has an important role. There is no shortage of projects in the Highlands which are worthy of support. Scottish Water's infrastructure programme will be especially significant and, in partnership with Morrison Construction, SCDI is organising a meeting with its new chief executive for our members early in the New Year in Inverness. The Scottish Government should assist home grown businesses in competing for a share of all these contracts.

We need short-action based on long-term thinking. Government needs to support industry to maintain capacity now and to take advantage of the opportunities which are available.

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