Friday, October 2, 2009

Construction firms least confident about post-recession growth

Construction firms are the least confident of all businesses across the sectors about growth prospects in the next six months, even if government figures from June to September are expected to show an overall growth of the UK economy and spell out the end of the recession.

56 percent of the construction firms included in the business confidence report released by banking group Santander witnessed a profit drop in the first half of the year; 21 percent reported a 10-20 percent decline in the first six months and 28 percent saw their profits drop by more than 20 percent.

At the same time, 12 percent of the construction firms had a rise of more than 20 percent, while four percent reported a 10-20 percent increase.

According to the survey, only 15 percent of the construction and building businesses are very confident, 58 percent are confident, 24 percent are not very confident and three percent are not confident at all that their profits will increase. 22 percent of the construction firms cited forward orders as the main indicator of confidence.

“Our research indicates that there is a lower level of confidence and optimism amongst construction and building services businesses compared with other sectors,“ said Steve Paterman, head of Santander Corporate Banking. “It is important that the banking sector supports these businesses and helps them to turn their confidence into profits. Banks need to learn from the downturn and build stronger relationships with their customers in order to provide solutions that will help their stability and growth.”

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Thursday, October 1, 2009

New construction jobs to be created in Scotland and Wales

A number of new construction jobs will likely be created in Scotland and Wales in the near future.

In Scotland, a £1.25 billion project to rebuild 55 schools has been approved and the names of the first 14 schools were announced this week by Fiona Hyslop, Scotland educations secretary. Secondary schools in Dundee, Fife and Edinburgh will be among the first in line to benefit from the project.

"This government and local authorities are already on track to lift 100,000 school pupils, by 2011, out of tired and crumbling school buildings and classrooms and provide them with cutting-edge accommodation and facilities," said Ms Hyslop.

The rebuilding project will be funded by the Scottish government (£800 million) and local councils (£450 million).

Scotland will also see one of the biggest construction projects in decades, with the news that two consortiums have bid to run the £2.3 billion Forth Replacement Crossing project. The rivalling consortiums are German firm Hochtief, American Bridge of Pennsylvania, Morrison Construction, and ACS of Spain on the one side and the Forthspan consortium -- Balfour Beatty, Morgan Est, BAM Nuttall and Vinci Construction Grand Projets -- on the other.

If it comes to fruition, the project will create a great number of new construction and engineering jobs.

In Wales, the demand for low carbon construction jobs could go up as a result of the initiative to create a greener economy and reduce carbon emissions.

Deputy minister for regeneration Leighton Andrews said that green construction could be “the key to economic regeneration” at the Regeneration Skills Collective Wales conference.

"Companies in the construction industry are well placed to take advantage of this growing 'green' market which could provide significant opportunities to a wide range of businesses and also create new [construction] job opportunities," said Andrews.

He also urged construction companies to switch to more sustainable practices. "As the UK and Welsh governments' procurement approach focuses on integrating sustainability, those Welsh companies adopting innovative approaches will increase their prospects for securing work and securing medium term profitability,“ he said.

The Welsh government has pledged to reduce carbon emissions by three percent year on year from 2011.

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Thursday, September 17, 2009

Cutting edge virtual construction training centre opens in Coventry

The first construction training simulator in the UK – the ACT-UK Simulation Centre - has opened with a pilot training course for Balfour Beatty in Coventry.

The ACT-UK Simulation Centre, located in Cheetah Road at the Coventry University Technology Park, has cost £8.7 million and is set to transform contruction training in the UK. It uses cutting edge computer simulation and actors to create a virtual construction site in great detail. Trainees use a computer joystick to tour the site and have to deal with different challenging site management scenarios based on real situations. The simulation concept is similar to maritime and aviation simulation training.

ACT-UK managing director Michiel Schriiver says, "It is great that so many people have helped us to reach this milestone - the completion of our first course. We’re very excited to be opening the ACT-UK Simulation Centre which introduces an entirely new style of construction management training to the UK. Using proven technology, the centre allows construction managers to test and develop their technical and people skills in a safe, controlled environment which is powerfully realistic. The simulation is so authentic that people forget they are in a training situation and become fully immersed in the challenge of managing the virtual site."

Engineering and construction industry leader Balfour Beatty has been collaborating with the ACT-UK (Advanced Construction Technologies, Ltd) Simulation Centre for the last two years on the development of training courses for their own employees.

"This takes our development and training to a different level," says Adam Parker, HR director for Balfour Beatty Construction Scottish and Southern. "Using VR (virtual reality) enables us to put our trainee project managers in a live environment without exposing them to any risks. This kind of cutting-edge training also makes us a very attractive proposition for graduates looking to come into the industry."

Balfour Beatty sub-agent Dariusz Mrugala had the chance to undertake the virtual reality training course. He said, "This is the best training I have ever had - I really enjoyed it. In the next 10 or 20 years this type of training will be standard in the industry. Normally you have people talking to you within a group exercise – I liked the fact that you are working on your own. I had never really thought before about the type of person that I am and that I can use my passion, imagination and power. The supervisors and actors showed me new ways to work and new ways to manage people."

The ACT-UK Simulation Centre is only the second virtual training centre of its kind in the world. The first one is the Dutch Building Management Simulation Centre, which served as the model for the Coventry facility.

Tuesday, September 8, 2009

Two industry leaders interested in Chief Construction Adviser position

Constructing Excellence chairman Vaughan Burnand and SEC Group CEO Rudi Klein are the first construction industry leaders to show interest in the Chief Construction Adviser role.

Burnand reportedly registered his interest in taking on the role earlier this week and has the support of leaders within the UK Contractors Group as well as in his own organization. He has not yet made any official statements regarding the position.

Klein, on the other hand, said, "I’d be very happy to do it and will register my interest because one or two people have been pushing my name forward, especially in the specialist sector."

The department for Business, Information and Skills formally announced the position in late August, saying they would like to fill the role by November. Construction minister Ian Lucas said, “We have taken our time to get the role right to ensure that it fits well with a range of new and existing initiatives. But I have heard the calls from the construction industry loud and clear since my appointment in June. We are now pressing hard ahead with recruiting. I want to see a high quality individual in place by November.”

The Chief Construction Adviser will be appointed for a minimum of two years, work three days a week, and earn £120,000 a year. Civil Engineering Contractors Association head of industry affairs Alasdair Reisner commented, "While the Chief Construction Adviser position that has been announced today may not be a full time position, we can see the benefit of any chosen candidate maintaining their links to their current role in the industry. As such, it is now up to the industry to provide the same support to whoever is chosen to take up the role."

Economic secretary Ian Pearson explained the position: "This role will provide a central 'focal point' for the construction sector acknowledging the value of this sector and the importance of delivering a sustainable and low carbon economy that remains competitive. The Chief Construction Adviser will help ensure that Government secures maximum value for money in its procurement of construction and thus support the aims of the Operational Efficiency Programme."

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Wednesday, July 15, 2009

Construction jobs stabilise in Northern Ireland and Scotland

Jobs in the construction industry will likely stabilize in the second half of 2009 in terms of new building contracts, according to Simon Rubinsohn, chief economist at the Royal Institution of Chartered Surveyors, even if it is still too early to speak of the 'light at the end of the tunnel.'

The residential sector has been the most affected one by the current economic crisis, but the commercial developments sector is also facing problems in the downturn.

Rubinsohn explains, "We've probably seen the worst of the collapse in output, but I'm not sure [it will] take off very quickly. It's going to be a fairly long haul, but we've probably seen the worst of the adjustment downwards."

The construction industries in Northern Ireland and Scotland have stabilised somewhat because of the rise in public sector building contracts according to June’s Glenigan Index.

Scottish construction industry has witnessed some peaks recently, mostly thanks to the civil engineering sector, in which the number of project starts grew 50 percent last year.

The utilities sector recorded a 16 percent rise in the value of planning approvals in 2008 and has stayed strong in the first four months of 2009. A number of wind farm construction plans are underway and Scottish Water is expected to continue with a strong investment program.

The private housing construction in Scotland, on the other hand, has been hit hard by the crunch: in the five months leading to May 2009, project starts fell by half compared to the previous year and are now at a three years’ low.

Experts predict that the construction sector in Scotland will improve in 2010. While the value of underlying construction starts will fall by 2 percent this year, a modest return to growth is expected in 2010.

In June, the Scottish Government announced construction plans for 1,343 council homes – a project worth £26m – and housing and communities minister Alex Neil acknowledged that the sector had been overlooked of late, but said that things were looking up: “Scotland’s housing stock has been left to wither on the vine. Backed by record funding, we are now working with councils across Scotland to reverse decades of decline in council house building.”

Commenting on construction industries in all regions in the UK, Glenigan economics director Allan WilĂ©n said: “Glenigan forecasts that the recent recovery in public sector starts will gather momentum during the second half of 2009. This will drive the overall stabilisation in construction project starts. Growing pressure on Government finances will temper this momentum in the medium term, however.

“We expect the current divergence in between the housing sector to widen over the coming months with an increase in social housing projects contrasting with a depressed private sector development which remains constrained by poor conditions in the wider housing market. The fortunes of non-residential construction will be mixed. Civil engineering projects starts will strengthen as new renewable energy, rail and road schemes commence.”

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Thursday, June 4, 2009

Construction market survey: workloads continue to weaken in Q1

Construction workloads continued to fall in the first quarter of 2009, according to a new market survey from the Royal Institute of Chartered Surveyors. About 45 percent of the surveyors who participated in the survey said that overall construction workloads fell in the first three months this year up from a net balance of -47 percent.

The bleakest figures come from the private commercial and industrial workloads sectors, where the respondents reported net balances of -57 and -61 percent respectively.

There was, however, an easing in the pace decline on the housing market. "This slight easing we are seeing in both public and private housing is broadly in line with the figures coming from the Government on the number of housing starts, which saw a small rise in the first quarter of 2009, and could be aligned to recent signs of a gentle pick-up in the housing market," said Simon Rubinsohn, chief economist at the Royal Institute.

Almost a half (46 percent) of the surveyors expect employment levels to drop, while as many as 72 percent believe that profits will be down in the coming months. "Despite some sub-sectors showing slightly more positive signs, construction output is likely to post a double digit drop over the course of 2009 with a further loss of employment and skills in the industry," Rubinsohn concluded.

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Wednesday, May 27, 2009

UK construction sector facing serious skills shortage

The construction sector in Great Britain is suffering a skills shortage despite the fact that fewer offices and homes are being built in the wake of the economic crisis, according to a new study from the Chartered Institute of Building.

Construction recruiters are being encouraged to take into account the results of CIOB's annual research as many construction industry insiders believe that the loss of skilled workers will make it much more difficult for the industry as a whole to recover in the long haul.

77 percent of the respondents believe that there is a skills shortage in the construction sector and 78 percent of them think that this will have a negative effect on the building industry once the economy improves.

CIOB’s study emphasises the need for people in the UK to take up skilled construction jobs and for the construction professionals who have been forced by the recession to leave the sector to return once recruitment increases again.

54 percent of the respondents said that their companies have had to make redundancies and 67 percent expect the demand for construction to decrease in 2009/10.

Not enough construction firms are employing apprentices, according to the survey. Only 37 percent of those polled said that their organisations were doing so, while 76 percent of the respondents think that apprenticeships ought to be mandatory on public projects.

CIOB Deputy Chief Executive Michael Brown said: "Construction has been notoriously bad at attracting students and other new entrants. This has exasperated the industry’s long-term skills development. There is no denying the importance of graduate and apprentice recruitment as these employees represent the future of the industry."

“There is a danger that once demand rises and recruitment increases there will be a mass of previously skilled workers who choose not to return to the industry having opted for other careers. The industry has never fully recovered from the recession in the 90's, particularly at the management and senior management level,” he added.