In Focus: Beyond the brickie
I was speaking this week with a prominent local lawyer about the construction industry in the East Midlands. Yeah, we know how to live alright. We both came to the conclusion that it was remarkable that despite the industry suffering the worst downturn in living memory, there has been little or no mergers or acquisitions in the sector.
One of the first things that any company operating in a crowded marketplace does during a deep recession is looking for merger opportunities. The legal sector is a prime example of this. In the East Midland we’ve had mergers between Harvey Ingram and Borneos, and between Berryman and Shakespeare Putsman. The legal sector has learnt that by creating space in the market, you’re more likely to win pitches. Can the same be said of the construction industry?
Some figures, then. The latest report from ConstructionSkills shows that output in the East Midlands is predicted to grow at an annual average rate of 0.9 per cent between 2011 and 2015, a marginally weaker increase when compared with the UK as a whole (1 per cent). The repair and maintenance (R&M) sector (1.8 per cent) should perform better than new work (0.3 per cent), with the latter being weighed down by the declining public housing and public non-housing sectors. Total construction employment in the region is forecast to reach 162,440 in 2015, up 7.4 per cent on the 2011 projected outturn and 2.2 per cent above the 2009 result.
That’s good news on the job front, then.
Judy Lowe, deputy chair of CITB-ConstructionSkills, makes an interesting point in the report, when she says: “Businesses need to retain their competitive edge, maybe looking at the Green Deal and the estimated 26 million homes in need of refurbishment.”
With the East Midlands R&M sector predicted to grow by 1.8 per cent, there should be enough encouragement there to go out and seek the refurbishment work. But working in partnership with rival firms is also needed if the sector is to tough it out over the next five years.
Looking further head, the report says energy and green technologies will be the main drivers of construction activity. Developments such as the 1.2GW Triton Knoll Offshore Windfarm in Great Wash will be important. Then there is the £200m gas fired power station in Newark, and the planned retrofitting of existing homes with energy efficiency and micro generation.
Different ways of working, then, are required from top to bottom if the construction industry in the East Midlands is to thrive again.
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