UK Steelwork Contractors have sufficient capacity to meet future demand

As the UK’s construction industry continues to grow, a new report from KPMG says that UK steelwork contractors have sufficient capacity to meet forecast demand for constructional steelwork, without the need for capital investment.

The KPMG report concludes that UK steelwork contractors hold latent capacity of between 205,000 and 406,000 tonnes.  This means that the UK’s constructional steelwork capacity lies between 1,142,000 and 1,343,000 tonnes against forecast demand for constructional steelwork of 1,050,000 tonnes in 2019.

Richard Threlfall, KPMG’s UK Head of Infrastructure, Building and Construction said ‘UK steelwork contractors hold latent capacity which will allow them to quickly increase production to meet the forecast rise in demand from the construction industry’.

The report concludes that the required increase in constructional steelwork output in the UK will be achieved through a combination of increasing shifts, use of agency staff, and fully utilising current production facilities, without the need for any capital investment.

Sarah McCann-Bartlett, BCSA’s Director General said ‘It is clear that with sufficient UK capacity to meet future demand for constructional steelwork, there is every reason to use a UK steelwork contractor.’

‘Using a UK steelwork contractor means shorter lead times, contractual security, exceptional quality of design work, better logistics on site and an excellent health & safety record’ she said.

The report notes that recent events in the wider steel-making industry do not provide a material short term threat to the supply chain.

Other sectors in the construction industry have spoken out recently about the significant risk of skill shortages in meeting future demand.  While KPMG identified the availability of skilled staff as a risk for the constructional steelwork sector, the industry has made significant recent investment in apprentices in order to address this issue, including the development of a sector specific apprenticeship scheme.

While tender prices are reflecting ongoing cost inflation across the construction sector, in particular as a result of wage increases, the latest cost modelling of typical office projects by Gardiner & Theobald shows that compared with a comparative concrete building, steel construction is 7% cheaper and 5% quicker for a low rise business park office, and for a city centre high rise, the cost is 4% lower and the programme 11% shorter.

Ms McCann-Bartlett recommends that main contractors use a BCSA Member company to ensure compliance with CE marking, health & safety, and other regulatory requirements.

The KPMG report can be found here.