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Build UK celebrates a ground-breaking first year

Build UK members less confident after Brexit

Build UK celebrates a ground-breaking first year

Build UK today (21 September 2016) celebrates its landmark first year of bringing the construction supply chain together and delivering change across the industry.

Build UK has achieved positive results on a number of high profile industry priorities. At its launch, Build UK published an Action Plan detailing the five issues it would address to achieve lasting improvements for construction, and its first year culminates with the
release of ‘Delivering Change’ which outlines the extensive progress achieved so far.

  1. Build UK committed to galvanise the image of the industry and inspire more people to join construction. The ‘Get into Construction’ film and hugely successful Open Doors initiative marks the beginning of Build UK’s efforts to transform the industry’s image
  2. The publication of the Build UK Training Standard represents a significant step towards ensuring that the outcome of construction training and qualifications meets the needs of employers while providing employment and apprenticeship opportunities
  3. Build UK continues to make progress in developing a solution to the pre-qualification process that benefits the construction supply chain
  4. Targeting improvements in health and safety performance and a reduction in accidents and ill health led to the development and adoption of the Build UK Safety Helmet Colours Standard by Main Contractors, Specialist Contractors and Clients
  5. Build UK’s commitment to bring the construction supply chain together to consider what best payment practice in construction looks like has resulted in agreement of best practice payment terms.

The recent addition of major construction clients to the collective voice draws the first year to a fantastic conclusion and highlights the extent of Build UK’s progress. With Brexit presenting a fresh challenge, having all areas of the industry at the table will enable a joined-up approach as the organisation strives to mould the future of construction.

Build UK Chief Executive Suzannah Nichol MBE said: “It has been a fantastic first year for Build UK and we have been able to make an impact on major industry issues from occupational health to the skills shortage, and our thanks go to all Build UK members for their huge part in helping us lead the way and drive long-term change. There are still some big challenges ahead for us as an industry, but we’re up for those challenges and can’t wait to see what we as the construction supply chain can achieve in the future.”

Build UK members less confident after Brexit

Results of the second State of Trade survey for 2016 show that whilst output from Build UK members rose before the EU referendum, there is uncertainty around future workloads following Brexit, with labour supply remaining a cause for concern.

The latest Build UK survey, which was undertaken by Glenigan, reveals that industry capacity remains increasingly tight with 81% of contractors operating at over 75% of their capacity and 46% operating at over 90% capacity. Enquiry levels during the second quarter of 2016 experienced little change from the previous three months, however output has increased by 22% which is a substantial increase compared to the 5% and 3% recorded in the previous two surveys.

When considering the upcoming quarter, 19% of contractors anticipate workloads to rise on the results of Q2 2016, with new build infrastructure and commercial sectors expected to be particular growth areas. However, this result is a decrease of 8% from the results of the last quarter (27%) and 11% from the Q4 2015 result (30%), reflecting the increasing uncertainty of the industry pre and post EU referendum.

This feeling of uncertainty continues when assessing the next 12 months. Overall, 21% of contractors still expect their own workloads to rise, however this represents a 5% decrease on the previous quarter (26%), and a 26% decrease when compared to Q4 2015 (47%). Furthermore, whilst contractors feel that their workloads will be higher in 12 months’ time, they also reported that they believe that the majority of industry sectors will see a decline in output, with only repair and maintenance work in the private other sector experiencing an increase.

Labour supply remains an area of concern for the industry, with 82% of contractors reporting that professional and technical employees were either ‘difficult’ or ‘very difficult’ to recruit. Three-quarters of firms cited difficulty in recruiting supervisors and bricklayers, with two-thirds specifying carpenters or joiners and ceiling fixers. Where contractors had experienced difficulties in recruiting staff, firms cited lack of experience (61%), lack of skills (57%) and a lack of qualifications (41%) as the reasons for the problems. These difficulties continue to impact upon the cost of labour, with 45% of respondents reporting an increase in labour costs compared to the previous quarter and almost two thirds (65%) reporting higher costs than a year ago.

In terms of payment, 35% of contractors reported waiting at least 46 days on average despite only 18% having average contract terms of 46 days or more.

Build UK Chief Executive Suzannah Nichol MBE said: “A period of uncertainty was inevitable following the decision to leave the EU and that has been reflected in the State of Trade results and, in particular, our members concern over future workloads. The most important thing is that we make the most of the opportunities presented by the referendum result, and we are already working closely with members to present a comprehensive response to Government with a view to crafting the best possible conditions for our industry to thrive in a post-Brexit Britain.”