Archive for category: Building News

November PMI^® data highlighted a robust upturn in UK construction output. However, new order growth eased to a five-month low and year-ahead business activity expectations were the least upbeat since October 2023.

At 55.2 in November, up slightly from 54.3 in October, the headline S&P Global UK Construction Purchasing Managers’ Index™ (PMI^® ) – a seasonally adjusted index tracking changes in total industry activity – pointed to a robust and accelerated expansion of overall construction activity. The headline index has now posted above the neutral 50.0 threshold for nine months running.

A faster upturn in construction output was driven by the strongest rise in commercial work for two-and-a-half years (index at 58.1). Survey respondents commented on improving customer demand and new opportunities to tender, despite relatively subdued economic conditions. Civil engineering activity (55.9) also expanded at a strong pace in November. That said, the rate of growth slipped to a three-month low.

House building (47.9) remained by far the weakest-performing category of construction work in November. The respective seasonally adjusted index was inside negative territory for the second month in a row and signalled the fastest rate

of decline since June. Construction companies once again noted that elevated borrowing costs and fragile consumer confidence had an adverse impact on demand conditions.

New business volumes increased across the construction sector as a whole for the tenth successive month in November and at a sold pace. The rate of growth nonetheless slipped to its lowest since June. There were some reports that political and economic uncertainty linked to the Autumn Budget had affected client confidence. Where growth was reported, it was often linked to new projects in the commercial sector.

November data highlighted only a marginal rise in employment numbers, with the rate of job creation easing to a three-month low. Anecdotal evidence highlighted increasing employment costs as a factor holding back staff hiring. Some construction companies commented on greater use of sub-contractors to help mitigate rising costs. This was signalled by an increase

in sub-contractor usage for the first time since July. Latest data nonetheless pointed to the steepest increase in sub-contractor charges for 16 months.

Purchasing activity meanwhile increased at the slowest pace since the current phase of expansion began in May, largely reflecting a loss of momentum for new order growth. Supplier performance deteriorated to the greatest extent since February 2023, with survey respondents mainly citing transportation issues and international shipping delays.

Construction companies recorded the fastest rise in their average cost burdens for 18 months in November. This was linked to a general increase in raw material prices, as well as efforts among some suppliers to pass on higher staff costs.

Finally, around 43% of the survey panel predict an increase in business activity during the year ahead, while 21% forecast a reduction. Although this signalled upbeat business expectations across the construction sector, the degree of optimism was down sharply since October and the lowest for 13 months. Anecdotal evidence from survey respondents widely suggested that worries about the UK economic outlook and impact on business investment from rising employment costs had weighed on business optimism in November.

COMMENT:

Tim Moore, Economics Director at S&P Global Market Intelligence, said:

“The construction sector bucked the slowdown seen elsewhere across the UK economy in November, according to the latest S&P Global PMI survey. Total industry activity once again expanded at a robust pace and there has been a clear acceleration in growth compared to that seen in the first half of 2024.

“However, the recovery in construction activity remains somewhat lopsided. Strengthening demand for commercial work and civil engineering projects

contrasted with a sustained downturn in house building. Commercial construction activity expanded at the fastest pace for two-and-a-half years in November, while residential work declined at the steepest rate since June. Elevated borrowing costs and fragile client confidence meanwhile acted as a brake on new order growth in November, with the upturn in sales the slowest for five months.

“A loss of momentum for new work, alongside concerns about rising employment costs, resulted in weaker

job creation and falling business optimism across the construction sector. The degree of positive sentiment regarding year-ahead growth prospects dropped to the lowest since October 2023. Many construction companies cited concerns about the near-term UK economic outlook and subsequent cutbacks to new projects.”

Gareth Belsham, director of Bloom Building Consultancy, commented:

“Construction isn’t so much a two-speed as a two-direction industry.

“With levels of commercial construction roaring ahead, and rising at their fastest rate for two and a half years, housebuilding is stuck in reverse.

“In fact residential construction has contracted for two months in a row, and November’s decline was the fastest seen since summer.

“With residential developers still chafing at high interest rates – which make it more expensive for them to buy land and build homes – and patchy consumer demand, the Government’s promise to get 1.5 million more homes built in England over the next five years is looking ever more pie in the sky.

“Official data shows that the value of new orders placed by private sector housebuilders in the third quarter of 2024 was down by a painful 34.4% compared to Q3 2023. With costs rising and demand falling, there’s now a real risk of stagflation in residential construction.

“By contrast, we’re seeing lots of commercial property developers pressing the button on previously paused investment plans, as well as an increase in the number of commercial property landlords investing in repair and refurbishment to generate extra value from their existing buildings.

“In many ways the momentum of the commercial property sector is dragging the wider construction industry in its wake. The headline figures still look good, but the scale of the imbalance between sectors is alarming and getting worse.”

Jordan Smith, technical director at Thomas & Adamson, part of Egis Group, said:

“There is an element of a reality check in the latest PMI report, with a real mixed bag in terms of indicators. The surge in optimism following the election has been tempered to a degree – particularly with the continued stagnation in housebuilding activity, which was a major part of the policy agenda. Interest rates remaining higher for longer, as well as fragile consumer confidence, will likely weigh on the sector’s prospects in the short term, until the government’s delivery plans are fully set out. We will be keeping a watchful eye on how this develops in 2025 and look forward to new residential sector opportunities in the new year with a number of clients.

“Despite relatively subdued economic conditions, there is still a lot to be positive about in today’s report and within the industry, in general – not least the faster upturn in overall construction output and rising commercial activity. We are engaged on and delivering a number of commercial refurbishment and retrofit schemes across the UK. The reported rise in demand and opportunities to tender also bodes well for the start of 2025, and this is something we are also seeing as a business with a number of projects secured for the new year. The fact remains that the headline index has been in positive territory for nine months running, and this bodes well as we move into 2025/26 and beyond.”

Work to turn a council-owned disused garage plot in Bristol into affordable housing thanks to the innovative Gap House concept has reached its final stage of construction.

The first factory-made panels, which will be used to create the external walls of the homes, have been lifted onto site and are now being installed in stages due to the constrained nature of the site.

Designed by multidisciplinary design practice BDP and built by contractor Beard and SIP (structural insulated panel) specialist Etopia, the nine one-bedroom, two-storey sustainable homes on Bell Close, Horfield, have been commissioned by Bristol City Council’s Housing Development team and funded by the local authority’s Housing and Landlord service.

The homes are being built using modern methods of construction (MMC), with the high-performance structural insulated panels (SIPs) manufactured off site, before being brought to Bristol by lorry and carefully lifted into position by crane. The installation of the internal walls, floors, and roofs is also underway. Groundworks had already taken place in preparation for this phase of work.

BDP originally showcased its Gap House concept design at the Housing Festival Expo in 2018, as a proposed way of helping to meet the city’s acute need for housing and revitalising neighbourhoods.

The Gap House concept was refined as part of an Innovate UK programme supported by the Housing Festival, designed to explore the potential for MMC housing. This year, it  featured in the Housing Festival’s Social Rent Housing: The MMC Playbook, a guide for local authorities, which highlighted Gap House as “an innovative approach to successfully unlocking land and overcoming challenges for successful creation of new housing”.

Each home will be highly insulated with low energy lighting to support minimal heating requirements and will use renewable energy generated by solar PV panels and air source heat pumps, resulting in low environmental impact and running costs.

The homes will include an open-plan kitchen-living area and a bathroom on the ground floor, with a bedroom and storage on the first floor. Large windows will allow for maximum natural light. The entrance to each property has been designed to promote a ‘front porch culture’ with green space and outdoor seating in front of each home to encourage social interaction and community cohesion.

Councillor Barry Parsons, Chair of the Homes and Housing Delivery Committee at Bristol City Council, said:

“The council welcomes the progress of these innovative new homes for social rent, which will help meet housing need in the city.  Utilising small pieces of brownfield land to deliver much needed affordable homes is a priority for the council and the learning from this, and other similar projects, will help us make better use of our smaller sites for affordable housing delivery.”

Adam Darby, associate architect in BDP’s Bristol studio, said:

“The Gap House has the potential to bring huge benefits to cities up and down the country where there are thousands of disused garage plots sitting empty, which could be transformed into much-needed housing. Having first conceived the idea of the Gap House some years ago, it is fantastic to see the project coming to fruition and nearing the moment when people can start moving in. A once derelict site will have a new lease of life, revitalising the neighbourhood and providing high quality homes.”

Matt Cooper, director of Beard’s Bristol office, said:

“The Gap House design is a thoughtful way to bring back to life disused urban spaces, and could contribute to addressing the housing crisis and improving local communities. Over Beard’s 135-year history, we have been involved in many residential projects, but none quite like this. Working with factory-made panels and within the limits of a small site has presented challenges that the team has embraced. It has been exciting to apply the innovative new methods to create sustainable, contemporary and affordable homes in the city.”

Andrew Tatt, head of delivery at Etopia, said:

“The Gap House project serves as an example for councils across the country. When driving through cities and towns, you see many underused plots of land, like garage sites, which could be repurposed to help address the housing crisis and revitalise these neglected spaces. BDP, Beard, and Etopia have demonstrated that, with careful planning, these sites can be transformed effectively—not just with any buildings, but with high-quality, fabric-first constructions that incorporate the latest technology and are designed to meet future standards.”

Over 70 per cent of construction managers have experienced delays to their projects over the last year due to major weather events.

850 construction managers were asked about the weather conditions that pose the greatest risk on construction sites. Extreme heat, freezing temperatures, excessive rainfall and flooding, and sleet and snow were named as the most disruptive.

2024 was a year of extreme weather across Europe. The summer was the hottest on record for Europe and globally, alongside wind speeds never seen before in Europe and severe cold spells. Freezing temperatures were cited as the biggest threat in Ireland, Germany, the Netherlands and Luxembourg, and sleet and snow were the biggest threats in France, Italy and Sweden.

One in three respondents in the UK and Belgium cited extreme heat as the biggest threat to on-site operations. This can lead to damaged materials and equipment and challenges for employee wellbeing.

The report from Aggreko, “Building in Resilience: Weather-proofing European Construction in a Changing Climate” also noted that 39 per cent of construction managers in the UK said that major weather-related delays had led to financial penalties on projects.

Tom Adlington, UK Construction Sector Sales Manager for Construction at Aggreko, said:

“Our report shows how significant an issue changing and severe weather conditions are for the construction sector in the UK and across Europe. The difficulties involved in addressing these issues is compounded by the wide challenges affecting the industry, including skills, equipment and materials shortages, as well as political and economic uncertainty and the need to decarbonise.

“This highlights the importance of effective supplier relationships and being able to source suitable well-maintained equipment to mitigate the impact of severe weather, whether in the form of, power, dehumidification or temperature control solutions that comply with the latest emissions standards.”

Source: Facilities Management

Current workloads for construction businesses have fallen to similar rates as the 2008 financial crisis, according to a survey from Federation of Master Builders (FMB).

Rising costs, skills shortages, and barriers to growth are all contributing to the slowdown in productivity in the construction industry. And as we approach the end of the year, we take a look at the trades which have suffered most and what areas of the industry are defying the trend.

Workloads continue to decline

Over the past three months, workloads for small builders are down seven per cent on the previous quarter. With low productivity stifling the construction industry throughout the year, it seems the trend could continue into 2025.

Rising costs of services, a drop in demand, and a lack of available workers all play a part in the decline in productivity, according to FMB’s research. But the main contributor may be an overall drop in enquiries.

Enquiries have fallen a further three per cent in the last three months compared to the previous quarter. With housebuilding being the most affected area of the industry, seeing a 30 per cent decline in enquiries in the same period.

Renovations defy the trend

While there’s a collective productivity issue, certain areas of the industry remain defiant. When FMB members were asked what their most common type of work was in the past three months, 67 per cent said renovations.

And with home improvements also experiencing a boost, it highlights the increased demand for smaller scale jobs. The fewer workers required for smaller jobs and tighter customer budgets potentially make renovation jobs more suitable for construction workers and their customers.

Employment rates fall throughout 2024

The shortage of skilled workers has been a defining factor for the industry in 2024. And according to the research from FMB, there’s been a steady decline in employment in each quarter of the year.

Almost a quarter (23 per cent) of FMB members reported a decrease in employees in the last three months. This has been consistent throughout the year, with the first (28 per cent) and second (24 per cent) quarters showing similar results.

Brian Berry, Chief Executive of the FMB, commented: “What is concerning is that the poor numbers reported by builders seem to be here to stay as they have been a constant throughout 2024. The last time such a negative trend was reported was in the years following the financial crisis of 2008.”

Skills shortage continues

And the struggle to hire certain trades continues. General labourers are proving the most in demand, with 34 per cent of respondents sharing their difficulty hiring them. FMB members also highlighted a shortage of:

• carpenters
• roofers
• painters and decorators

With 38 per cent of respondents saying the skills shortage has resulted in job delays, it’s clear this is contributing towards the overall decline in workloads.

Rising prices compound issues

Tradespeople are spending more on materials and wages. As a result, they’re charging more for their services. The majority of FMB members (65 per cent) indicated that rising costs led to an increase in their prices. And over half (54 per cent) have lower than expected profit margins, which is an increase from 52 per cent in the last quarter.

Low productivity and rising costs have left the industry in a challenging position. And businesses are having to adapt to this environment.

Over a quarter (26 per cent) of respondents said they’ve had to restrict recruitment plans due to cost pressures, a slight increase from 22 per cent in Q2 2024. This leaves some small businesses in a position where they don’t have enough skilled workers to take on work while also feeling the pressure of rising costs.

And these circumstances are so testing that 10 per cent of FMB members shared that their business has been put at risk of closure.

Brian Berry thinks increased funding is a key solution for the industry.

“The government missed a key opportunity in the October Budget to announce serious funding to tackle the skills crisis while tax rises, such as the increase to employers’ National Insurance contributions, creates additional barriers with firms already struggling to recruit staff,” he said.

Source: Simply Business

Building Services Industry Has Two Years to Fix Indoor Air Quality

A policy paper launched at the Building Engineering Services Association’s World Ventilation Day event suggests there is a “two-year window of opportunity” to prioritise air quality when assessing building performance.

Speaking at the event, Yselkla Farmer, Chief Executive of the energy and infrastructure trade association BEAMA, described indoor air quality and ventilation as a “poor relation to energy efficiency” when it came to assessing building performance. BEAMA’s new policy paper urges governments to broaden the Energy Performance Certificate (EPC) remit to recognise and evaluate the indoor air quality of homes.

She said: “The push for better energy performance in buildings [has led to] a clear disconnect with the need to ensure building occupants are healthy. This has played a significant role in creating what is now a national health crisis.”

65,000 UK homes suffered from serious mould and damp leading to over 10,000 deaths each year linked to respiratory illness, cardiovascular disease and mental health.

Why is IAQ a “Voluntary Compliance Area?”

“IAQ should have the same focus as fire and electrical safety in the building regulations.  Why is this issue, which actually causes more deaths, still a ‘voluntary’ compliance area? [Warm Homes and EPCs] are a legislative framework we can work with – so let’s use this window of opportunity.”

The meeting was also addressed by Rosamund Adoo Kissi-Debrah CBE, air quality and child health campaigner, who recently received an apology from the government for the death of her daughter Ella which was linked to air pollution. Ella had been exposed to “excessive” levels of air pollution and that levels of nitrogen dioxide (NO2) near her home exceeded WHO guidelines.”

Rosamund Adoo Kissi-Debrah CBE. Image Credit: BESA

Rosamund said: “The government is concerned about the economy and money, so we need to focus on the cost of not cleaning up the air and the impact that will have on the NHS as more people get sick and die. Without cleaning up the air this miracle they think will happen with the NHS will not be possible.

“We have heard that the government does not think the public is concerned about air quality, even though every single one of us breathes air, every single minute of every day.”

BESA Indoor Air Quality Group chair Adam Taylor said the government should also support a public awareness campaign to raise the profile of IAQ in homes, schools and workplaces:

“We need to communicate some simple but powerful messages to the public about the impact of poor IAQ on health and its links to premature deaths.”

Source: TwinFM