What The Future Holds?
According to a recent report, over 60% of all industry professionals believe that 2010 will be a more positive year that 2009.
The survey, conducted by KPMG, asked almost two hundred leading construction company owners, if they felt profits would remain consistent or increase in 2010. Of all the respondents asked, over 50 %were positive.
However, Tom Ford, a piling contractor based in Manchester, thinks that while the outlook is more positive, the construction and piling industry still relies heavily on the stimulus packages given by the government and various Marco economic factors.
Construction Purchasing Spend Declines
According to a recent report by the CIPS/Markit index, the pace at which purchasing spend has fallen in the construction industry, has speeded up dramatically throughout October.
According to research, the sector that has been most affected is civil engineering, though as the latest figures reveal, no area of the construction industry has gone unscathed.
While residential construction did increase for the second month in a row, the accelerated decline across both civil and commercial sectors indicates that the UK’s construction industry is still firmly in the recession.
Mark James, the administrative editor of the report, comments: “While there are promising signs of recovery with the UK’s construction sector, the latest figures reveal that a return to pre-recessionary spending is still a long way away.”
Construction Industry Slow to Recover
According to a recent report conduced by the Construction Products Association, construction output will fall 15% this year and continue on to descend until 2010.
While results of the last quarter suggested that the UK’s property market is on the road to recovery, the latest figures reported by the Construction Products Association suggest that it may be some time before the construction industry fully recovers.
Commenting on the report, chief executive of the Construction Products Association Mike Ankers states; “News of an uplift in the property market encouraged many to predict the end of the recession. However, our latest forecast reveals that, while the future does look positive for the construction industry, the pace of recovery will be slower than initially anticipated.”
Mr. Ankers added: “One of the main objectives of the CPA is to ensure that the government is aware that the recovery of the construction industry, is key to the broader economic recovery of the UK.”
Are We on The Road to Recovery?
The past month has seen many key economists announcing, that the UK is well on the road to economic recovery. However, though the construction industry is now contracting at a less alarming rate, it is still struggling.
In August, we welcomed news that the rate of deterioration had slowed. However, this can mainly be attributed to a decrease in demand for new houses. Indeed, there are still many challenges, threatening the industry’s full recovery.
The most unanticipated of which, is the decline of the civil engineering sub sector. Throughout the recession, this sector had remained remarkably buoyant. However, August witnessed the sectors worst ever recorded results. Not only does this indicate that – despite initial reports of economic recovery – the UK’s construction industry is still volatile, it also highlights flaws in the government’s economic stimulus plan.
In other areas, the residential construction sector has experienced a slower rate of contraction in August than reported in previous months. Meanwhile, the number of construction workers facing redundancy has been though to have significantly reduced.
In conclusion, as the rate of contraction slows across all areas of the construction industry, it definitely seems that we are on the road to recovery; however, the question as to whether the construction industry will ever fully recover from the impact of the recession over the last year, remains unanswered.
Bid-Rigging Contractors To Face Lower Penalties
When the story bid rigging in the public sector broke over 18 months ago, it again raised the issues of inefficient tendering in the public sector and cover pricing. Cover pricing is a progress where a potential bidder and a client agree that the bidder will tender an massively over priced bid without any intention of carrying out the work, in order to satisfy client requirements for a certain amount of competition and ultimately keep costs low.
At the time, leading industry experts claimed that private sector clients were well ahead of the public sector, mainly due to the fact that the government procures projects based on low price rather than quality and reputation.
The scandal prompted calls for an inquiry by the Office of Fair Trading, as piling contractors, and many other industry sectors felt the current situation was illegitimate.
A report in the Sunday Times revealed that the construction companies that co-operate with the OFT, will face much more lenient penalties.
Piling, Underpinning and Construction Sectors Expect a Boost, as House Prices Stabilize
The Royal Institute of Chartered Surveyors (RICS) 2009 Housing Survey,revealed that the housing market is on the road to recovery ,albeit from historic lows.
More and more people are registering their interest in buying property, while the relative number of new properties available is still at an all time low. As a consequence RICS expect house prices to initially stabilize and begin to increase towards to beginning of next year.
The report revealed, that the number of chartered surveyors declaring a rise in new clients, has increased for the eighth consecutive month. The survey also found that over 50% of all surveyors that took part, felt that as house prices continue to stabilize, new developments will start again and subsequently, construction industries such as piling, underpinning and contracting as a whole will experience growth.
Chartered Surveyor, James Heath, commented: “Ultimately, we have experienced an uplift in the number client enquiries we have recieved, over the last quarter.Consequently, I do feel that the historic lows we have experienced over the last year will not be repeated into 2010.Yet, it is vital to remember that the stabilization of property prices, has been a direct result of the lack of new properties being built. If the property industry is ever going to fully recover, development work needs to begin again. ”
Piling Work Has Begun For the 2012 Olympics
When the news broke that London had succeed in its bid for the 2012 Olympics, mass hysteria hit the capital. However, when the dust began to settle, our attention turned to the implications of taking on such a huge responsibility and how the UK’s construction industry would cope – anyone remember the Millennium Dome debacle?!
However, recent pictures released by The Olympic Delivery Authority (ODA) confirm that from piling to underpinning the construction of the 2012 Olympic Village is well underway.
Piling work has begun
The village will hold the ‘big five’ main areas of the Olympic Stadium, Aquatics Centre, Olympic Village, VeloPark and the International Broadcast Centre/Main Press Centre (IBC/MPC).
While initial plans for the Olympic village have been scaled down as a consequence of the recession, it will still be a sizeable development. Recent images reveal there will be space for nearly 20,000 beds, housed in eleven residential areas which will be converted into houses eventually. There are also plans for over 10 ha of recreational space, again which will be used productively after the games.
Matthew James, who worked at the Commonwealth Games held in Manchester 2003 comments: “The Athlete’s Village was such an important part of the games in 2003. The sophistication of that construction and the success of the development process, really set the tone for the whole event.”
Currently, the Olympic Village is providing employment for just over one thousand workers , however, this figure is expected to increase to just over four thousand as the games approach. Piling work has begun on all the major blocks and work on the Aquatics Centre is scheduled to start next month.
Welcome to the New MK Piling Blog
Welcome to the new MK Piling Blog!
Having been in the industry for a number of years, we have earned an enviable reputation as one of the construction industry’s market leading piling specialists.
On this blog, we aim to track trends in construction, property and housing, giving our readers unrivalled access inside the UK’s construction industry.
Please feel free to comment on any of our posts and we look forward to hearing your views.
Regards,
The MK Piling Team