Unpredictability and uncertainty are making it difficult for the construction industry to meet the urgent demand for housing. Paul Groves examines the issues affecting the sector.
The political and economic uncertainty still impacting on the UK will undoubtedly have major implications for the housing market and housebuilding industry.
Combine this continuing climate of uncertainty with the significant changes we are expecting to see following the Grenfell Tower fire and there is little optimism to be found as regards housing at present.
The Construction Products Association’s latest state of the industry report shows the scale of the difficulties and challenges the industry is already facing.
“Part of the criticism is that ministers simply do not listen to the industry and so progress has been continually hampered”.
Despite Government policies aimed at encouraging a massive housebuilding push, barriers to hitting the set completion targets have not been removed and in some cases are increasing.
There has been justifiable criticism that although the headline-grabbing policies appear to be signalling a positive outlook, the lack of joined up thinking means the industry is often taking one step forward and two back.
Although the Government claims there has been sufficient consultation prior to announcing its raft of policy pronouncements, part of the criticism is that ministers simply do not listen to the industry and so progress has been continually hampered.
Tightening of profit margins
As Richard Beresford, Chief Executive of the National Federation of Builders said: "Although SMEs have found more work, project viability seems to be increasingly stifled by spiralling material costs.
“Construction SMEs are reporting a tightening of profit margins, which may impact productivity in the coming twelve months.
“The Government must enable constructors - particularity SMEs - to establish a pipeline of work either through more streamlined procurement or by reforming the planning process. However, the weakening pound shows that, in the long term, constructors either need improved access to material markets or short-term financing for project completions.
“The Government must deal with the impact of a weaker exchange rate and Brexit more urgently. It must work with industry to understand and navigate more unpredictable and potentially difficult times.
Paul Groves is Editor of Specification Magazine.
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