The UK construction industry isn’t looking healthy. Output is stagnating and profits are dwindling along with them. With a conservative financial outlook on the industry, many construction companies will soon be forced to head back to the drawing board.
This comes after news that the UK’s construction industry put in its worst performance for 10 months in February after the slowest rise in housebuilding since 2013.
The Markit/Clips UK construction purchasing managers’ index (PMI) registered 54.2 in February, the lowest figure since last April.
Lack of optimism in construction
A senior economist at Markit, Tim Moore, said, “Survey respondents noted that underlying business conditions remained favourable, especially in relation to commercial building and infrastructure-related work, but some clients had been hesitant to commit to new projects so far in 2016.
“Reflecting this, new order growth weakened again and construction firms were the least optimistic about their year ahead growth prospects since December 2014.”
It makes for sobering reading – a construction industry reticent to commit to new projects will leave a lot of workers out of a job.
Despite this fact, wages for construction professionals have risen by 10 per cent in the past year, while advertised vacancies in the construction sector ballooned to 50,007, compared to 39,412 in March 2014.
But if you’re in the construction industry, especially a little higher up the food chain, you’ll have to find productive ways to maintain profits.
Building materials are some of the most expensive objects on a site – but you can cut the cost by forging relationships with material and tool providers.
For adhesive products, we’d recommend Tensor, a long established glue provider that can supply you with marine glue, composite adhesives and much more. They also run a loyalty programme which allows you to purchase adhesive for cheaper if you’re a long-serving customer.
Another respected provider to the construction industry is Howdens, an outlet created specifically for joinery. Trade customers can also enjoy a large discount when they sign up enough employees, so give them a look for cheaper interiors.
Balance risk and reward
A large reason why building projects aren’t being started yet is that the risk has become a lot higher for management. In the 2008 economic meltdown, the construction industry was hit hard with spiralling debts and abandoned projects.
In many ways, it’s still licking its wounds three-quarters of a decade on, remaining risk averse and focusing largely on safe bets like luxury accommodation (affordable accommodation, despite demand, is still largely not catered for).
Your construction industry is no different. Weighing up the pros and cons of a building project is still vital before investment. However, if you want to stay ahead of the curve, being less risk averse can be a positive step towards a resurgence in the growth of the sector.
These are only two options. If you’ve got anymore, let us know in the comments below.