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New Minister for Construction

Following the creation of the new Department for Business, Energy and Industrial Strategy (BEIS) the full list of ministerial responsibilities within the department has now been confirmed and Jesse Norman, Hereford MP has been given government responsibility for construction and infrastructure.

Norman, who was elected as the MP for Hereford and South Herefordshire in May 2010, is one of several MPs brought into the new Department for Business, Energy and Industrial Strategy, led by business secretary Greg Clark.

His responsibilities include:

  • infrastructure/construction
  • rail supply chain
  • industrial policy (supporting the Minister for Climate Change and Industry)
  • professional services
  • technology
  • aerospace
  • energy policy (supporting the Minister for Energy and Intellectual Property)
  • nuclear
  • oil and gas, including shale gas

His role will also include ministerial responsibility for rail supply chains, technology, and assisting the energy minister Baroness Neville-Rolfe with nuclear policy.

On Twitter the MP said “very sad to be leaving @CommonsCMS, but honoured and delighted that I have been appointed as a Minister at the new DBEIS.”

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Construction workloads continue to grow slowly, post-referendum

The pace of increase in workloads in the construction market continues to slow, according to the latest RICS UK Construction Market Survey, extending a trend that goes back to the middle of last year.

This flatter picture is visible across all sectors; 17% more respondents reported a rise in activity over the previous three months compared with 28% in the first quarter, with the most pronounced slowdowns being seen in the private commercial, industrial and housing segments. That said, 27% more contributors still reported a rise in private housing activity – down from 36% in Q1 – while 17% more respondents saw their workloads in the private commercial sector rise rather than fall in Q2.

Significantly, for the second successive quarter, the biggest constraint on output according to respondents is finance with more than two-third of contributors highlighting this as the principal challenge. In breaking down the term financial constraints, 36% of respondents reported that a lack of funding was restricting new developments. Meanwhile, planning and regulatory delays also remain a key issue with 60% of respondents citing that these are constraining growth.

Despite the slowdown in activity in Q2, skills shortages remain a problem with 56% of contributors reporting that a lack of appropriately skilled labour was a constraint on growth. Bricklayers and quantity surveyors remain in particularly short supply with 59% and 57% of respondents citing difficulties in these areas.

The more uncertain prospects for the economy have led to a less optimistic outlook for the sector over the year ahead. Although, putting this in perspective, 23% more contributors still expect activity to rise rather than fall over this period. On average, contributors foresee their workloads increasing by 1% over the coming 12 months, down from the 2.8% growth predicted in Q1.
Expectations for employment growth have also moderated significantly with a rise of 0.6% anticipated, down from 2% the previous quarter.

Aside from in Scotland where activity flatlined relative to Q1, respondents in all other parts of the UK continue to report a rise in workloads.

Simon Rubinsohn, RICS Chief Economist, commented “The latest results from the RICS Construction Market Survey suggest that the second quarter of the year saw a further moderation in the growth trend which is not altogether surprising given the build-up to the EU referendum. Significantly, the biggest issue at the present time alongside uncertainty looks to be credit constraints with over two thirds of contributors highlighting this issue as a concern.

“Encouragingly, the swift actions of the Bank of England in creating additional capacity for the banking sector to provide funding to meet demand should help alleviate some of this pressure. Nevertheless, anecdotal evidence does indicate that the challenge for the British government in establishing a new relationship with the EU could see some investment plans in the construction sector scaled back.”

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No sign of a Brexit impact on construction in June with £6.2 billion worth of contracts awarded

After an eventful final week of June with a series of shocks sent through the economy, the construction sector managed to hold strong, with new orders reaching £6.2 billion on the month, the highest figure of any month so far in 2016.

According to the June edition of the Economic & Construction Market Review from industry analysts Barbour ABI, the two stalwarts of the construction sector; residential & infrastructure, both had year on year rises in June, with contract values increasing by 26 per cent and 14 per cent respectively.

London regained the top spot for construction contract value by location back from Scotland after it held the position over the last two months, mainly due to a number of major renewable energy projects. London’s construction boost this month was helped greatly by the award to develop the Bechtel House Hammersmith valued at £275 million and the first phase of the £100 million Royal Albert Dock project. Both these major schemes help propel office construction to a total of £650 million worth of contracts awarded on the month, contributing to 81 per cent of all commercial and retail construction value.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “With the majority of the sector under the assumption that the UK would not vote to leave the European Union the result left many surprised, and our June figures are under the assumption that it would be ‘business as usual’.”

“We have seen housebuilder stocks fall in the wake of the vote and anecdotal evidence that projects are being cancelled. However, that is not evident in the data as of yet and it is a case of wait and see in terms of the impact Brexit may have.”

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We must make tackling the skills shortage a priority, urges industry

Construction professionals have stressed how despite the fallout following Brexit, we must focus our efforts on combatting the looming skills crisis by prioritising the introduction of new initiatives to attract workers into the various sectors that span the construction industry.

Thinking ahead

Chris Wood, CEO of Develop Training Limited, the UK’s leading training specialist in the utilities sector, commented “The skills shortage in the UK is a catastrophe waiting to happen, one that literally threatens to turn out Britain’s lights. A solution to the twin problems of a chronic skills shortage in our utilities industry and high youth unemployment is obvious – train young people to take the places of the ageing workforce, but it just isn’t happening at anything like the rate that it needs to be. The new PM and her Cabinet must make it a government priority to look into ways to correct this issue as a matter of extreme urgency.

“As householders and businesses in the UK wonder about a post-Brexit future, they should remember that the utilities sector is still facing a potentially devastating skills shortage. The sector is constantly on a recruitment drive but is simply not receiving the response it requires.

“We all need confidence that our lights will stay on, our heating will continue to keep our houses warm and our taps keep providing running water, but the day is fast approaching when there will simply not be enough workers to do these vital jobs.”

Home-grown talent

Brian Berry of the Federation of Master Builders has also echoed concerns post-Brexit regarding the retention of skilled EU workers and the training of new talent. Berry said “We need to ensure that we invest in our own home-grown talent through apprenticeship training. We need to train more construction apprentices so we are not overly reliant on migrant workers from Europe or further afield. That’s why it’s so important that the Government gets the funding framework right for apprenticeships – when you consider that this whole policy area is currently in flux, and then you add Brexit into the mix, it’s no exaggeration to say that a few wrong moves by the Government could result in the skills crisis becoming a skills catastrophe. The next few years will bring unprecedented challenges to the construction and house building sector, and it’s only through close collaboration between the Government and industry that we’ll be able to overcome them.”

Diversity

Skanska, who recently won the Judges’ Supreme Award and Diversity Champion of the Year Award, have suggested that we need ensure the culture of our industry is both inviting and nurturing in order to alleviate the shortage long-term.

Mike Putnam, President and CEO Skanska UK, said “We believe that a diverse and inclusive culture is key to creating a successful and sustainable business. It will help us to create teams where people think differently, while making them better placed to understand the needs of the communities in which we work.

“It is through the way that our people embrace diversity and create an open and welcoming environment that we are able to work collaboratively – with our customers, joint venture and supply chain partners.”

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HS2 will still go ahead, pledges new transport secretary

The new Secretary of State for transport, pledged to continue backing HS2, following uncertainty around the project post-Brexit.

On a BBC Radio 4 interview, Chris Grayling promised not to scrap plans for high speed 2, despite suggestions having been made that HS2 is under threat of being cancelled by David Cameron and industry experts. Grayling said “I have no plans to back away from the HS2 project.”

Before the Referendum, in June, Prime Minister David Cameron addressed Yorkshire residents at the Yorkshire Post’s offices in Leeds, and warned of uncertainty for the project if Britain left the EU.

“If we stay in [the EU] all our plans are fully intact and that includes HS2, and what we have said about HS3, and the overall rail investment programme,” he said.

“If we come out, of course I’m sure we will want to try and maintain these important investments. But when you hear nine out of ten economists, the Bank of England, the Treasury, the IMF and now the National Institute [of Economic and Social Research] all saying our economy will be smaller and will generate less tax revenue, obviously that does threaten potentially some public spending programmes.”

In the interview, which took place on the BBC radio program “The World This Weekend”, the Transport Secretary explained that the importance of HS2 is two-fold; not only will it speed up transport links between the North and South, but it will also help meet an increasing infrastructural demand and ease congestion on overcrowded roads and trains.

Grayling said: “The thing that’s important for people to understand is that HS2 is not simply a speed project, it’s a capacity project. We have lines at the moment which have seen huge increases in the number of passengers, the amount of freight in recent years.”

“The west coast mainline, for example, is becoming really congested. It’s limiting the capacity of services to places like Northampton and Milton Keynes.

“Of course it makes sense, if we’re going to build a new railway line, for it to be a fast railway line, to reduce travel times from north to south. That’s logical.

“But actually we need a better transport system for the 21st century, and HS2 is part of increasing the capacity of our transport system.”

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87% of UK builders missing out on business due to poor online presence

Interesting Research conducted by Yell has highlighted invisibility issues online for small businesses.

Yell, one of the biggest providers of digital marketing in the UK, has discovered an overwhelming majority of builders (87%) it researched have wrong or inconsistent information online, including basic details such as a phone number or email.

Feedback shows 89% of customers say they will try another company if the details listed online for a particular business are incorrect, suggesting many small businesses, including builders, are missing out on a lot of potential custom.

Yell conducted research into how the 50,630 builders in its UK database appear online, also asking customers nationwide about their online habits and expectations. The results paint a gloomy picture pointing to some basic errors in small businesses’ approach to reaching potential online customers.

Key facts:

51% of customers said when they were looking for a new service, the most important source of information was a website

Having inconsistent or non-existent information online means small businesses are missing out on potential custom with 54% of people relying on positive online reviews when deciding on a new local business or service

      • There are 93 builders names in the UK beginning with the name “Alan”
      • There are 145 builders names in the UK beginning with the name “Andrew”
      • There are 104 builders names in the UK beginning with “Complete”
      • There are 381 builders names in the UK beginning with the name “Dave” or “David”

If a company’s information online is wrong, it’s arguably worse than not being online at all. – Mark Clisby, Yell’s Marketing Director.

“Not only is the company effectively invisible to customers, it can also seem careless or even untrustworthy. This often happens because companies don’t always know all the listings sites where they appear, or when they move they forget to update their information. It’s easily done, but can be incredibly damaging for business.”

“A lot of small businesses tell me they get all their business from word of mouth and don’t need to be online. However, they’re ignoring the fact that word of mouth has moved online, with more than half of all customers choosing a local business based on online reviews. That’s a lot of work to be missing out on,” concluded Mark Clisby.

To support small businesses, Yell has launched Connect, a service recognising the importance of connections, word of mouth recommendations and referrals. It helps business owners make their details visible online and get in front of the people looking for local products and services.

Connect uses smart technology to automatically list and update business details everywhere they need to be online, accurately and consistently. Details include company name, address, telephone number, logo, opening hours and payment methods on sites such Facebook, Twitter, Google+ and 100s’ of other high profile sites. As part of the service, Connect also helps set up social profiles on Facebook, Google+, Twitter and Foursquare. A centralised dashboard enables customers to view analytics, monitor and respond to online reviews, and post both real-time and scheduled updates on their social networks, as well as update their business details online at the click of a button.

Yell is offering small businesses in the UK the chance to try out Connect by completing a free scan of their business online. By entering the business name and address, Connect is able to identify how visible a business is online and, most importantly, report on how accurate the information is. On average, over 240 people a day are running the free Connect scan to check business details online.

Additional interesting insights revealed by Yell’s research into small businesses across the UK within its database showed that:

        • 5,612 small business names include the phrase “& Sons” or “& Son” but only 30 contain the phrase “& Daughters” or “& Daughter”
        • The most popular letter for small business names in the UK to start with is ‘A’, with 1 in 10 starting with ‘A’
        • The first five letters of the alphabet, A-E, account for 40% of the first letter of all small business names in the UK
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New ONS figures indicate increased uptake of construction materials

The Brick Development Association, the body that represents the clay brick and paver industries in the United Kingdom, has responded to recent comment about the state of the construction industry. The growth in the brick deliveries over the last month follows extensive work manufacturers have undertaken over the last year.

Figures released today from the Office of National Statistics (ONS) and Department for Business Innovation and Skills show that brick deliveries in May increased by 3.1% on the same month the previous year. Additionally, the month on month change shows a 0.6% increase in May 2016, following a 1.5% increase in April 2016 on the same basis.

Andrew Eagles, CEO of the Brick Development Association said “There is currently some uncertainty at central government. All major parties though support a drive to significantly increase home building numbers. Osborne’s move away from austerity and the likely interest rate drop are likely to improve the construction environment.

“It is important to look at statistics. There has been a significant increase in brick production over the last twelve months and this is confirmed by the latest ONS statistics.

“It is heartening to see how quickly and how dramatically the sector has risen to meet demand [and in particular contribute to the much needed rise in housebuilding.”

This recognition only adds to the current emphasis on the need for housing. Housing minister Brandon Lewis has promised to build 1m homes by 2020, to bridge the gap in recent years between houses built and houses required, which should lead to further growth within the brick industry.

“The increase of brick deliveries throughout May is a positive contribution to the revitalisation of the housebuilding sector”, Eagles added. “When the volume of new housebuilding starts to grow closer to the 200,000 a year target the brick industry will satisfy demand.”

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Is HS2 under threat from Brexit?

Suggestions have been made that HS2 is under threat of being cancelled, following the UK’s vote to leave the EU.

“The priority for the Government at this time will not be big sexy projects such as HS2,” said Lord Berkeley (Labour peer and Chairman of the Rail Freight Group).

This was a sentiment echoed by Richard Threlfall, head of infrastructure at KPMG, who said: “Getting attention on important strategic infrastructure decisions, I fear, has just got significantly harder.”

Before the Referendum, in June, Prime Minister David Cameron addressed Yorkshire residents at the Yorkshire Post’s offices in Leeds, and warned of uncertainty for the project if Britain left the EU.

“If we stay in [the EU] all our plans are fully intact and that includes HS2, and what we have said about HS3, and the overall rail investment programme,” he said.

“If we come out, of course I’m sure we will want to try and maintain these important investments. But when you hear nine out of ten economists, the Bank of England, the Treasury, the IMF and now the National Institute [of Economic and Social Research] all saying our economy will be smaller and will generate less tax revenue, obviously that does threaten potentially some public spending programmes.”

With uncertainty over the future leadership of the Conservative party and whether the new leader will be supportive of HS2, critics of the project are hopeful.

However, HS2 spokesman Ben Ruse said in RAIL Magazine “We are continuing to make HS2 a reality. It is business as usual and could very well be that HS2 is need now more than ever.”

Written by Stefanie Browne
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EU exit delivery plan needed to boost construction sector

New construction statistics for June, which show the weakest sector performance for seven years, are a cautionary sign of the damage that current uncertainty is causing to the building industry.

Brian Berry, Chief Executive of the Federation of Master Builders, said “June’s PMI figures, which show a huge dip in construction output, reflect our fears that uncertainty over the outcome of the EU referendum would hit our sector.

“In the wake of the UK’s vote to leave the EU, there is a growing concern that this period of uncertainty is only just beginning. Construction is an industry that is particularly vulnerable to dips in confidence and it appears that many clients were hesitant to commit to new projects as they were unsure of what the future held.

“An exit road map is needed to show what steps are going to be taken to withdraw from the EU.

“Today’s results underline the importance of clear leadership from the Government – it’s imperative that it attempts to offset any uncertainty firms will be feeling. Today’s announcement by the Chancellor that he would seek to lower corporation tax to below 15% is a positive step, as was Greg Clark’s recent reaffirmation that the Government will still aim to build one million new homes by 2020. However, much more needs to be done. Dithering over infrastructure decisions will send out entirely the wrong message to firms of all sizes.

“More than ever, investment is needed in a sector that generates £2.84 in the wider economy for every £1 spent. Public investment in our sector could play a vital part in warding off an economic slump, but today’s findings show that it will be far from business as usual.”

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Minecraft teaches students how to overcome common construction problems

More than 400,000 UK construction workers are set to retire between 2018 and 2023 creating an urgent need to attract a new generation of construction professionals.

‘Craft your Future’, developed by the Chartered Institute of Building, is a construction game aimed at 12-14 year olds that takes place in Minecraft. Through it young learners explore the methods and skills to become a construction manager, introducing them to a career in construction.

In a series of four freely available Minecraft Education Lessons, that can be downloaded by teachers anywhere and accessed via the Minecraft Education Platform, students encounter a variety of problems that reflect construction challenges in cities today. The lessons take place in Newtown, a specially created virtual city in Minecraft, to design, plan, collaborate and build solutions that develop a sustainable future for all its citizens. Exercises also include real life scenarios like the challenge of restoring Battersea Power Station.

Bridget Bartlett deputy chief executive at the CIOB said “Combining Minecraft and a thorough curriculum for the teacher makes for a unique and immersive experience and will help reveal why the industry is important and why a career in construction can be so rewarding. There are 70 million people playing Minecraft and just like Lego it has the capacity to inspire and attract a new wave of construction managers into an ever-increasing digital industry.

“What is exciting is that these young learners will not only have fun but also develop their communication, team working and mathematics skills; skills that construction has a high demand for. The lessons are designed to be teacher friendly and we hope construction employers will also want to use them in schools as they bid to switch the next generation onto a career in construction.”

Minecraft is being successfully used in schools to teach computer science programming, chemistry, physics, architecture and even introducing some of the world’s most famous artists to young people through games like Tate Worlds by the Tate.

Such is the impact of Minecraft Education in March 2015 it was announced by the Department of Culture, Arts and Leisure that it will provide free licenses to over 200 schools (circa 50,000 school children), and 30 libraries in Northern Ireland to inspire creative writing and engage young people in city planning.

Working with The Gameworkshop from Denmark and the Danish Architecture Centre each CIOB lesson runs between 3 – 6 hours where groups of students usually in teams of 3 or 4 collaborate across the lessons. The lessons cover 4 areas of construction, maintenance, restoration, new build and refurbishment.

Speaking about the lessons Pia Rost Rasmussen from the Danish Architecture Centre said: “These lessons will teach young learners about the importance of architecture, building and city planning and inspire them to engage with the built environment – both as future professionals but foremost as citizens who have a role to play in how our common environment is shaped to fit society’s needs.”

Watch the backstory video below:

To read all the supporting information about the lessons please go to http://ciobmc.org.
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