Archive | General

Presidents Column (June 2020)

The lockdown is starting to be relaxed and although things won’t be back to normal any time soon, a lot of construction sites are open (with the exception of some in Scotland) and most steelwork contractors are working. We all look forward to more restrictions being lifted over the summer, but I worry that The Chancellor, Rishi Sunak, has warned of a ‘severe recession, the likes of which we haven’t seen’ and some
commentators talk about 10% unemployment not just for the short term but for up to 5 years, it’s important to me that we don’t talk ourselves into recession.

We are seeing projects put back and a reduction in the number of enquiries. You may be interested to read that the ‘Building Conference’  reported a continued downward trend in both the number and value of contracts awarded in the first two weeks of May.

In the six weeks before the lockdown there was an average of 122 contracts awarded each week. In the first and second weeks of May, there were just 66 and 94 contracts awarded respectively and the value of the contracts awarded fell from an average of £2.08 billion per week to just £0.3 billion in the first week of May and £1.43 billon in the second week of May. These are grim stats but let’s hope this is a more of a holding pattern and the work will flow through soon. This reduction in the pipeline of work is likely to hit the Construction industry at the worst possible time. The Job Retention Scheme is scheduled to end at the end of October just when the industry will need it.

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Presidents Column (May 2020)

We’re all acclimatising ourselves to new ways of working. For most steelwork contractors the restrictions have resulted in home working and social distancing in factories and offices, where being organised and planning work around the social distancing requirements is paramount. There were some mixed messages at the start of the lockdown, but this was a temporary measure to introduce better health and safety measures and the majority of sites in England and Wales are now open.

The social restrictions have now been in place for six weeks as thoughts focus on the future and the ‘new normal’. Most of us have taken to virtual meetings using ‘video conferencing’ and while for many this was a new way of communicating, the benefits of not having to travel long distances for short meetings are clear enough. As one CEO put it, “for a meeting in London I usual get up at 5.30am catch the 7.30am to London, hold a meeting from 10.30 until 15.30 and take the 17.30 train home. With video conferencing I don’t have to leave the office and I can have five meetings a day”. The benefits of virtual meetings are obvious and its highly likely that the new normal will involve less travelling and more virtual meetings. It’ll not be just the FD that likes that one, the dog gets an extra walk.

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Presidents Column (April 2020)

The world is facing unprecedented times. The effect of the coronavirus (COVID-19) pandemic on the health and wellbeing of the nation is still uncertain. Each day the number of people infected, and the number of deaths increases. We are also getting more stringent information on social distancing; pubs restaurants, clubs etc have been closed as have some parks and public spaces. We can only go outside for food, health reasons or work – but only if we cannot work from home. Further restrictive measures including ‘curfews and prohibitions’ on movement may yet be imposed.

The government and the Chancellor have introduced unprecedented peacetime measures to ensure companies and employees make it through the pandemic and are able to continue their business and social lives once the pandemic is over.

But what are steelwork contractors doing? Like most companies they are trying to follow government guidance, but this is changing rapidly, and the measures put in place today may be different from those needed tomorrow. These are very challenging and stressful times.

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Presidents Column (March 2020)

Sorry to start on a gloomy note, but I’m dismayed to read on a regular basis that main and specialist
contractors are going under or in difficulty.  These are long-standing companies whose expertise and skills are a great loss to the construction sector, at a time when skill shortages are becoming more obvious and when we need to attract a new and more diverse set of people into the industry. This mirrors the economic uncertainty and challenges of recent times with a softening in activity and delays in investment for large construction projects. Looking back to the start of 2018, the steel sector and others warned the Government about “the Carillion effect”; that the true ripple effect on the industry as a whole would not be felt until 12 to 24 months down the line, I think we are seeing this play out now.

We must focus on financial due diligence, good housekeeping and contract management. We must stand back on receiving an enquiry and think about whether we want to work for that company. What is the financial standing of my client, perhaps I can get advance payments, offer a retention bond or have monies set aside in trust in an escrow account or project bank account? Can I get credit insurance for the main contractor (and if not, why not?) Who is the main client on the project? When are payments due?  Will payments flow through properly and when will my retention be released? These are the sort of questions and assessments for a go/no-go decision and it’ll probably avoid having to face the aggravation of sorting it out after cash has left the business. Continue Reading →

Presidents Column (February 2020)

There’s little doubt that climate change and sustainability are gaining momentum in our domestic lives as well as in industry. Greta Thurnberg argues that humanity is facing an existence crisis and that climate change is fast becoming the number one issue for the world. Perhaps the scale of the fires in Australia has shown us this in some way

This shift in emphasis towards carbon reduction has put it in the spotlight for us all. As it’s not going away anytime soon, we’ll also be under this spotlight.  We may all have to change the way we live and work to reduce future carbon emissions otherwise extreme climate events will become more frequent and damaging.

The construction industry has a major part to play in this drive to net-zero carbon. We need to do more with less; maximise the efficient use of resources and move towards a truly circular economy. This is the Module D strategy, and the Paris Agreement brings carbon reduction into focus.
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Presidents Column (January 2020)

The adage cash is king is never more real, cashflow is the life blood for any company. Recent developments with late payments, retentions and increases in the cost of Professional Indemnity insurance coupled with the proposals from government to impose reverse VAT on parts of the construction industry are stretching some companies to breaking point.

Many steelwork contractors are suffering from the doubling and trebling of PI insurance premiums. Insurance companies that are willing to offer cover are offering it for ‘aggregate’ claims and are no longer for ‘each and every’ claim. Undoubtably, the hardening
of the insurance market could have been affected by events at Grenfell that none of us want to see a repeat of, but I suspect there’s more to it than that. I’d like to see insurance companies take into account the professionalism and quality of specialist contractors.

All of BCSA’s members are subject to annual audits that focus on all the good practices that demonstrate good governance and professionalism.

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Presidents Column (November 2019)

What’s going on in the construction sector at the moment? On one hand, we have the statistics implying its all doom and gloom, and on the other hand, many of my customers are saying they’ve never been busier. How do we reconcile these conflicting sentiments, and what do they mean for us all?

The IHS Markit / CIPS UK Construction PMI has been in the doldrums for months, sitting well below the 50 break even point. Their latest data release for October was 44.2, following on from September’s weak 43.3. Experian is expecting a flat year for construction this year, up 1.2% and the ONS new orders data for quarter 2 was 13.3% down, more than reversing the gains we saw in the first quarter of this year.

But when I speak to my customers, they all say they’re flat out and never been busier tendering. So what’s the story?

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