A round up of the sector's biggest news

30 March 2022

STANDING IN SOLIDARITY WITH UKRAINE

First and foremost, our thoughts and prayers have been with the people of Ukraine during what’s been described as one of the biggest attacks since the Second World War.

Russia’s invasion rippled across the globe, shaking financial markets and increasing geopolitical tensions. It’s also impacted the construction industry the world-over.

Ukraine’s once thriving construction industry has ground to a near halt. Large scale public and private construction projects had been underway on highways, bridges, offices and apartments – now, employees are ordered to stay at home and seek safety.

Closer to home, related sanctions may mean supply of materials will cause issues for UK construction projects, on top of adding to cost inflation pressures which will cause additional challenges as the industry gears up for a busy summer season.

Then there’s other day-to-day matters to contend with; an escalating climate emergency, building safety regulation, razor-thin margins, staffing… It’s certainly been a turbulent period of adjusting forecasts and changing expectations.

Without further ado, let’s take a look at what’s been gaining traction in the Construction sector over the past few months.


RISING FAST: UK CONSTRUCTION OUTPUT

February saw the fastest rise in construction output in the UK, with building companies kickstarting new projects brought to tender. On top of reliable pipelines of new residential and commercial work, businesses reported increased client confidence and demand.

But, (there’s always a but)…

Firms continued to grapple with the impact of rising costs, materials and labour shortages, as well as widespread delivery delays. Whilst client confidence was up, business owners were less optimistic. Understandably they’ve been uneasy about securing supply and offsetting price rises from every angle to improve business margins.

But, (there’s a second) – we all know this industry is hugely resilient.

As the economy recovered from Omicron variant outbreak and Plan B restrictions were fully lifted, UK construction companies achieved fast expansion. Battling the headwinds of supply, constraints eased and input cost inflation dipped to an 11-month low.

Source: PMITM by IHS Markit


A DRIVE TOWARDS SUSTAINABILITY

The industry’s under increasing pressure to take environmental factors into consideration when starting new projects. According to the UK Green Building Council, the UK built environment is responsible for 25% of total UK greenhouse gas emissions, but new buildings are becoming more energy efficient, with companies seeking greener building materials and processes.

The challenge now rests in ensuring the sustainability story doesn’t become policy without action for those working in the Construction & Built Environment, enabling true change and meaningful, positive impact.


ARCHITECTS’ OPTIMISTIC AND WORKLOADS UP

On the whole, workloads are on the up and optimism amongst architect practices is strong. RIBA, in its February Future Trends Survey, suggests 2022 may be the year that our new normality becomes settled. That said, worry lies with inflation putting cost pressures on practice finance and reducing profitability.

For the first time since the onset of the pandemic, all work sectors have returned a positive balance, with the Private Housing sector remaining the strongest.

An important caveat however is that the data used was gathered before the Russian invasion of Ukraine, so does not give insight into any secondary, economic effects the profession may feel.


CHAMPIONING WOMEN IN CONSTRUCTION

To mark International Women’s Day and this year’s #BreaktheBias theme, many firms have pledged to increase the number of women working in construction, making it a more diverse and inclusive profession as a whole.

The Chartered Institute of Building (CIOB) estimates that only 14% of the construction workforce are women with only 2% onsite as trades workers such as electricians or bricklayers.

There’s now a drive in the sector to improve the training and education for people wanting to work in construction to develop the female construction leaders of the future.


BRINGING AN END TO UNSAFE CLADDING

Following the tragic fire at Grenfell Tower back in 2017, the government’s clamping down on home developers who refuse to pay the costs of removing unsafe cladding. These proposed measures came shortly after Michael Gove announced a new £4bn fund for the remediation of unsafe cladding on buildings of 11 to 18 metres in height. He said developers would be expected to pay their fair share to fix dangerous buildings, or face legal or tax changes.


31 FIRMS COLLAPSE INTO ADMINISTRATION

February saw the highest level of construction firms falling into administration since the start of the pandemic.

Cashflow challenges were evident way before Covid hit, then when it did, project delays and inflationary pressures ensued, making it tougher for already struggling firms to bounce back.


HEADING TO UK CONSTRUCTION WEEK 2022?

This year’s highly anticipated UK Construction Week (UKCW) live show event will explore how to implement new behaviours, best practice and a cultural shift in building for the future.

The event in May is expected to bring more than 25,000 people together to explore how the industry implements new behaviours, best practice and a true cultural shift in how it builds for the future.

UKCW, the country’s largest live show for the construction industry and all its related professions and trades, is running in London at the ExCeL centre on 3-5 May.


 

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