008 RCI 0417

RCI April 2017

Zink INDUSTRY NEWS 01992 801927 www.almhm.co.uk Construction sees slowdown in SME entrants, but the industry is still optimistic Residential building remains strong through first months of 2017 008 APRIL 2017 RCIMAG.COM Copper Stainless New research has found that the construction sector has seen one of the slowest increases in SME growth since 2010 as a result of the barriers the industry faces. The research, conducted by Hampshire Trust Bank in partnership with the Centre for Economics and Business Research (CEBR), has revealed the three sectors that demonstrated the highest growth were technical and professional (39%), information and communication (33%) and business services (25%), with construction falling behind the UK average of 17% at 4%. Barriers to overcome From its experience of working with SME house-builders, Hampshire Trust Bank attributes the lower levels of SME growth to the high number of barriers they have to overcome, such as planning costs and access to appropriate finance, which it says is contributing to the UK’s broken housing market. However, with increased activity outside of London and the South East in cities such as Manchester, Birmingham and Bristol, smaller construction firms have opportunities for future growth. The study also identified that, despite a lower percentage of smaller firms entering construction, the sector does have a higher number of SMEs overall, but financial concerns were identified as barriers to growth in the industry, which may deter start-ups in the sectors. Three in 10 (28%) construction companies said competition in the market was the biggest barrier to growth. Overall growth in sector While growth levels remain below other sectors, nearly half (49%) of SMEs in the construction market are optimistic about the long-term economic prospects for their sector and recent Markit data has shown there is more modest growth in the sector as a whole, which includes the smallest firms to larger housebuilders and contractors. Robert Grigg, managing director of property finance at Hampshire Trust Bank, said: “Our report identifies SMEs in the construction sector have grown at a slower rate than other industries over the last few years. Our team works specifically with SME housebuilders and with demand for housing continuing to outstrip supply, our customers are coming up against barriers to developing this vital housing stock. Issues such as planning costs and turnaround times result in an uphill battle for smaller property developers. “We were pleased to see the Government identify that SME house-builders hold the key to fixing the UK’s broken housing market in the recent Housing White Paper and the latest Markit data indicates stronger growth in the sector. As we have identified, firms are finding new opportunities out of London and the South East in cities such as Manchester, Birmingham and Bristol and companies local to these regions should also start reaping the success of newly regenerated cities too. What is crucial is that the Government focuses on how these SMEs can be more competitive quickly, to not only take a step towards boosting sector growth but help more people take their first steps onto the housing ladder.” Spearheaded by strong performances from the housing and hotel, leisure & sport sectors, overall contract value for the construction industry reached £6.4bn in February, based on a three-month rolling average, a 15.4% increase on the same month last year. According to the latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, contracts for housing projects reached £2.7bn in February, the same figure as January 2017, which are the best performing months for residential building since the economic downturn. Coinciding with the strong housing figures, the hotel, leisure & sport sector construction contracts reached £736m on the month, a substantial 105.3% increase compared to February 2016. Looking across the other sectors within construction; infrastructure accounted for £1.48bn worth of construction contracts on the month, a 20.8% increase on January. Commercial & retail projects also increased month on month by 17.5% – the highest since September 2016, although values in the sector remain lower than previously when viewed over the longer term. However, it was the industrial sector that accounted for the most disappointing figures in February, with a 35% year-on-year decrease and its lowest monthly total since October 2014. Whilst the value of construction contracts remained very strong on the month, the number of projects saw a decline of 19.6% compared with January. Larger, more valuable projects were commissioned in February, including projects such as a £400m Port of Dover job and the Trafford Park Metrolink extension, valued at £350m. Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “After recent slumps in the infrastructure and commercial & retail sectors, it was encouraging to see both bounce back and produce encouraging figures in February, alleviating some of the pressure away from housebuilding. “With the hotel, leisure & sport sector recording its highest construction contract value in years, it will give the sector a well needed confidence boost, thanks greatly to a £400m holiday resort, another major project given the go-ahead in February, a trend that made last month a positive one for construction.” Construction workers lose more than 120 hours a year to smartphone use at work New research has found that the hours, and 59% regularly take LaptopsDirect.co.uk, said: “It’s no average British worker spends as personal phone calls whilst surprise that we are addicted to our many as 120 hours per year using working. smartphones however overuse their smartphones in the 52% admit to answering instant during working hours can add up, workplace, and those working in messages via platforms such as leaving a serious shortfall in construction are among the worst Whatsapp and Facebook, whilst productivity. Although companies culprits. 9% have sent a Snapchat from their The study of 2,012 UK adults workplace. carried out by gadgets and 44% of respondents said their technology retailer workplace permitted reasonable LaptopsDirect.co.uk has revealed use of smartphones. more than three quarters (78%) of More than a third (38%) regularly construction workers admit to check their social media accounts using their smartphones during while in the workplace. working hours. 78% regularly respond to personal Addicted to smartphones text messages during working Mark Kelly, marketing manager at monitor and prohibit the use of social media during the working day, the research shows that there is still a large amount of people continuing to use their device. Hours of lost productivity “Use of smartphones and social media in the workplace can lead to hundreds of thousands of hours in lost productivity per year, which could cost UK companies millions of pounds.” 14% have been told off for using smartphones at work, while just 4% have been disciplined for use of their own tech during work time.


RCI April 2017
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