Building News is an information portal for all professional building specifiers. Here you can find all of the latest construction news from around the UK and the rest of the world.

Construction experts RICS have expressed concern for some time about the impact of Brexit on construction, particularly as positions harden.

Construction and Infrastructure market surveys continue to illustrate the ongoing skills shortage. However, the ‘Preparing for Brexit’  report released this week underlines the potential wider impact on productivity and investment in a post-EU Britain.

EU worker shortage

The ‘Preparing for Brexit’ report warns that losing access to EU workers in the construction sector could make it harder to achieve infrastructure ambitions, also reducing firms capacity to hit Government housing targets amid the continuing housing shortage regularly illustrated in the RICS UK housing market survey.

It is easy to see how London would be disproportionately affected in terms of construction and skills, and both for the capital and beyond it is an absolute necessity that construction workers and built environment professionals, such as quantity surveyors, are added to the UK occupation shortage list.

Wider implications

Looking at the wider implications in the analysis released this week, the impact on supply chains and the flow of construction materials and goods could confound this picture as around two-thirds of both export and imports of building materials are with the EU. Moreover, losing access to access to EU funding streams – including potentially the European Investment Bank (EIB) – and the dampening of demand from foreign investors due to uncertainty would be a further threat.

The UK Government must act promptly to keep EIB funding or introduce a new lender, or lending mechanism, to plug the gap created from the potential loss of EIB funds, particularly for shovel ready projects that are of great importance to the capital.

This year a range of regulatory updates and government-led initiatives are expected to have an impact on the construction industry, potentially affecting thousands of tradespeople across the UK.

2018 could be instrumental in terms of making – or preparing to make – significant changes for trade professionals and the services they deliver. To help, IronmongeryDirect has produced an overview bringing together these key changes.

Independent Review of Building Regulations and Fire Safety

Following the tragedy of the Grenfell Tower fire in June 2017, the government launched an independent review into building regulations and fire safety. Led by Dame Judith Hackitt the review is examining the regulatory system around the design, construction and ongoing management of buildings in relation to fire safety and related compliance, as well as enforcement issues and international regulation and experience in this area.

An interim report was published in December 2017 which stated that the current regulatory system for ensuring fire safety in high-rise and complex buildings has been deemed “not fit for purpose”.

Speaking about the report, Dame Judith said: “There is plenty of good practice, but it is not difficult to see how those who are inclined to take shortcuts can do so. Change control and quality assurance are poor throughout the process. What is initially designed is not what is being built, and quality assurance of materials and people is seriously lacking.”

Tradespeople are advised to familiarise themselves with the findings when the full report is published in spring 2018, since it could bring about changes to working practices.

Additional Funding for New Homes

The autumn budget provided positive news for the construction sector which should start to filter though during 2018.

£15.3 billion of additional funds have been made available to facilitate the construction of 300,000 new homes a year over the next five years. In addition, the skills shortage in the construction sector has been addressed with the Chancellor setting aside £204 million to train younger trade professionals.

The government will also be introducing the new technical vocational qualifications – or ‘T Levels’ – and increasing the hours of training for technical students aged 16-19 by more than 50%.

Wiring Regs

Mainly affecting electrical professionals, but still very important for construction projects are the changes to the Wiring Regulations, due to be announced in July 2018.

Co-published by the Institution of Engineering and Technology (IET) and the British Standards Institution (BSI), the 18th Edition updates are likely to be wide-ranging and will affect the whole electro-technical industry. From 1st January 2019, it will be a requirement that all electrical installations designed after this date comply to the updated regulations.

It is important for tradespeople working in this field to at least be aware of these changes.

Consultation on Cash Retention

With a shift in focus to small business management, the current consultation launched by the Department for Business, Energy and Industrial Strategy is addressing the practice of cash retention under construction contracts.

According to a recent survey, one in three businesses (32%) said that between 3 and 10% of their turnover was being held in retentions.

The results of the consultation will not be released until later in 2018 but it is hoped that they will lead to changes that will result in prompt and fair payment for firms working in the construction sector, particularly small and start-up businesses.

Government and industry should build upon its pioneering work in digital engineering to improve the performance of UK infrastructure and unlock growth across the country, according to a report from the Institution of Civil Engineers (ICE).

Digital Transformation calls on Industry and Government to use the Modern Industrial Strategy to drive the uptake of digital technology and data in infrastructure design and delivery. This transformation could drive up productivity and unleash the full potential of the UK’s economy, while also creating a world leading industry.

According to the report, the UK cannot build its way out of pressures from population growth and climate change. Digital transformation would enable the UK to do more with existing assets and networks.

This includes the workforce, with the report calling for both industry and the Government to place greater emphasis on upskilling and reskilling mid-career professionals in addition to existing initiatives that target young people.

The report’s key recommendations include:

  • The £23billion National Productivity Investment Fund should prioritise digital transformation of both construction methods and physical infrastructure which increases capacity and performance of existing assets and networks
  • The Department of Business, Energy and Industrial Strategy should put digital transformation at the heart of the Infrastructure Pillar of the Modern Industrial Strategy, realising the UK’s potential as a world-leader in this sector
  • Industry and Government must ensure that people at all points in their career have the right skills to adapt to advances in technology and information management. Major infrastructure projects should be used as incubators for skills and innovation

Dr Anne Kemp, Chair of the ICE State of the Nation Steering Group, said “The Government rightly recognises the link between improved connectivity and balanced national productivity. Our decision-making must put the user at the centre, delivering new infrastructure that enables people to get to work and enjoy their leisure time. However, much of our current infrastructure will still be here in 30 years’ time, so we must use technology to do things smarter and make more of what we already have. We must be more imaginative in what we mean by digital transformation and what it can achieve.

“Similarly, we cannot afford to wait for the next generation to arrive with the right skills. The current adult skills agenda must go beyond basic digital literacy initiatives but instead look at better training for our existing workforce.”

UK construction companies signalled a positive end to the year – led by the fastest rise in new order volumes since January 2016, according to the latest Markit/CIPS UK report. Stronger demand patterns resulted in sustained job creation and a broad-based upturn in business activity during December. However, the construction sector continued to experience intense cost pressures as suppliers passed on higher imported raw material prices. The latest rise in overall input costs was the steepest for just over five-and-a-half years.

At 54.2 in December, up from 52.8 in November, the seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI® ) signalled a robust and accelerated expansion of overall construction output. The headline index has now posted above the 50.0 no-change mark for four months running, and the latest reading signalled the fastest pace of expansion since March 2016. Anecdotal evidence suggested that improving order books and a general rebound in business conditions had helped to lift construction output in December.

Construction

Residential building activity remained the best performing sub-category at the end of 2016. Moreover, the latest expansion of housing activity was the fastest since January. Work on civil engineering projects also picked up at a robust pace in December, while commercial construction increased only marginally.

New business volumes expanded at the strongest rate for 11 months in December, which marked a sustained recovery from the soft patch seen in mid2016. Reports from survey respondents cited rising client demand and a resilient economic backdrop. Greater workloads encouraged a further solid increase in staff recruitment across the construction sector. The latest rise in employment was the fastest since May, but still much weaker than seen on average since the jobs rebound began in mid-2013.

December data indicated that exchange rate depreciation continued to drive up input prices across the UK construction sector. The latest Page 2 of 4 © IHS Markit 2017 increase in average cost burdens was the fastest since April 2011. At the same time, supplier leadtimes continued to lengthen, with the latest survey pointing to the most marked deterioration in vendor performance since June 2015. Some construction firms noted that forward purchasing had resulted in low stocks among suppliers.

Meanwhile, construction companies reported a reasonably upbeat assessment for their growth prospects in 2017. Around half of the survey panel (48%) anticipate a rise in business activity during the next 12 months, while only 13% forecast a reduction. The degree of business confidence edged up to a three-month high during December, with a number of construction firms citing optimism that strong order books would help alleviate Brexit-related turbulence in 2017.

Tim Moore, Senior Economist at IHS Markit and author of the Markit/CIPS Construction PMI® said “December’s survey data confirmed a solid rebound in UK construction output during the final quarter of 2016. All three main areas of construction activity have started to recover from last summer’s soft patch, but in each case growth remains much weaker than the cyclical peaks seen in 2014.

“Housebuilding remains a key engine of growth for the construction sector, with the latest upturn the fastest for almost one year. Meanwhile, commercial activity was the weakest performing category in December, reflecting an ongoing drag from subdued investment spending and heightened economic uncertainty. “The main negative development in December was a sustained acceleration in input cost inflation to its strongest since 2011. UK construction companies noted that the weaker sterling exchange rate had resulted in higher costs for a wide range of imported materials, while some also reported that forward purchasing of inputs had led to depleted stocks among suppliers.”

David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, added “The residential sector raced ahead this month, with the fastest pace of growth since January 2016. Strong pipelines of new work were reported across all sub-sectors, and construction firms showed improved confidence after the impacts of uncertainty around the EU referendum.

“Prices continued on their upward inflationary trajectory, at the strongest rate for five and a half years. In response, firms have increased their stock buying to not only fulfil new orders, but also to counteract anticipated price increases throughout the year, as inflationary pressures are set to continue and the weakness of the pound persists. Stock levels at suppliers were also under pressure, as vendor performance deteriorated to the greatest extent since June 2015.

“With these more resilient economic conditions, the sector also reported the fastest pace of job creation since May 2016, as companies developed their workforces to meet new projects. “In the short-term at least, the sector looks set to enjoy these improved demand conditions for the coming months, which is positive news after many months of instability.”

Construction

Commercial properties make up an enormous portion of the built environment. They serve as a platform for most of the country’s major industries and provide the general public with areas in which to work, shop, socialise and relax. Needless to say, commercial buildings play a crucial role in 21st century Britain. However, despite investment in this booming sector being ever on the rise, commercial buildings are amongst some of the poorest performing buildings in terms of energy efficiency. Joe Bradbury, Editor of Building Specifier and MMC Magazine investigates the importance of efficiency, exploring what changes can be implemented in 2018 going forward in order to help achieve this goal.

According to the Committee on Climate Change, the commercial sector is accountable for approximately 26% of all greenhouse gas emissions from buildings in the UK. The world’s population is currently consuming the equivalent of 1.6 planets resources a year. The Global Footprint Network estimates that if we continue to consume at current rates we’ll blow the global carbon budget and lock in more than 2C of global warming in approximately 17 years.

As a result of this, the EU is currently reviewing its EU 2030 energy efficiency targets, with buildings in general highlighted as having great potential to reduce global emissions if efforts are made to make them more energy efficient.

How can we become more efficient?

There are so many things that commercial building owners and specifiers can do to become a little more eco-friendly, but in broad terms there is a 3-step process that should be followed in order to do so:

  1. significant investment in skills and capacity to enhance building management and deliver energy efficient refurbishment
  2. installation of low carbon generation capacity
  3. the design, manufacturing and fabrication of energy efficiency products and services

Heating and lighting are two areas in particular where changes need to be made. Let’s look at those two areas in more detail:

Light at the end of the tunnel

A cityscape at night is aesthetically a beautiful thing to behold; anybody who has seen the glowing lights of Vegas in the vast blackness of desert night, or London skyline reflecting on the surface of the Thames, will concur. Unfortunately, it is also an incredibly inefficient and irresponsible use of energy and a waste of precious resources. Overnight lighting is just one of many bad habits held by the commercial sector today. It is also one of the easiest to fix.

In 2013, France made it a legal requirement for shops and offices throughout the country to turn off their lights overnight in a bid to fight light pollution. This is expected to save 250,000 tonnes of CO2 per annum – roughly enough energy to power 750,000 French households for a year, according to the French Environment Ministry. So, if you want to reduce the carbon footprint of your building, put that light out!

Another easy but effective change that can be implemented immediately is to upgrade to LED lighting. It requires very little upfront investment, and delivers immediate returns.

Typically the energy savings made from switching from a conventional source to LED is 50-60%. They also require changing much less frequently, meaning that savings will also be made in terms of maintenance. This benefit is two-fold, affording the maintenance team the time to be more proactive in energy initiatives rather than changing lamps.

A recent California Energy Commission study also estimates that savings will be two times higher by the year 2020 by switching to LED than they are at present, when the technology becomes even more efficient.

A hot tip

The costs of heating and cooling a building are always on the rise. Often, addressing energy efficiency without a multi-system approach can be futile, with no tangible savings being made. Again, as with lighting, it is largely a behavioural change that will most benefit the commercial building sector in meeting efficiency targets going forward. For instance, a mere broadening of the range of temperatures inside your building, scheduling heating and lighting to vary according to peak occupancy times, can make drastic reductions to carbon footprint and energy bills.

Buildings are accountable for over 30% of final energy consumption in the world. 15% of this energy is used in the heating and cooling of interior spaces. Therefore it is imperative that you look at your heating and cooling systems if you want to make improvements.

Currently, the heating of buildings is largely based on fossil fuel burning technologies and cooling is dominated by incredibly carbon-intensive electrical systems. Studies suggest that by implementing low or zero-carbon heating and cooling methods in buildings – such as solar thermal, heat pumps, combined heat and power (CHP), and thermal energy storage – we have the potential to lower CO2 emissions by approximately 2 gigatonnes and save 710 million tonnes oil equivalent of energy over the next 34 years.

For many existing buildings, a change in the heating a cooling system and the building envelope accordingly can prove to be high in initial outlay and very disruptive. Some retrofits need a complete overhaul of their existing heating and cooling systems, insulation, windows etc. Sadly, the higher initial costs involved and the subsequent longer wait for financial return results in many buildings choosing to plod on using existing inefficient heating systems. This often hampers other energy efficiency efforts that have been made, making the strive for energy efficiency an earnest but ineffective endeavour.

Although it can be expensive, do not overlook the multitude of sustainable heating and cooling options on the market today. It is only through a multifaceted approach that the commercial building sector can truly make a tangible impact on its carbon footprint.

In summary

An efficient building is a productive building. By being considerate in how we generate and use energy, we can help reverse manmade climate change whilst simultaneously receiving a series of lucrative fringe benefits as an industry. We can also set an example for future generations to follow – ensuring that professionals within the built environment always have a healthy, vibrant environment in which to build for many years to come.

The average new home in England will have to last 2,000 years if the sluggish rate of house building and replacement continues, the Local Government Association have warned.

The country has not built enough homes for decades. As a result, existing homes must house more people and last for much longer, which has led to the country spending nearly as much on the repair and maintenance of existing homes as it does building new ones.

But analysis reveals that one in 10 new home buyers are dissatisfied with the quality of their new home and one in six would not recommend their house builder to a friend.

The research, carried out for the LGA, also reveals most local areas have more homes built before 1930 then from any other period of time, demonstrating the age of much of England’s housing stock.

The LGA is calling on government to help councils build a new generation of high quality, genuinely affordable and additional homes, supported by adequate infrastructure and services. Housebuilders also need to work with councils to ensure new homes are built to a good quality, and will stand the test of time.

With increasing numbers of people in the private rented sector, council leaders are also concerned that 28 per cent of privately rented homes are not decent, an increase of 150,000 homes since 2006. In comparison, council homes are more likely to be better quality, with 85 per cent meeting the decent homes standard, an increase from 70 per cent in 2008.

Local government leaders insist a “national renaissance” in council housebuilding must be central to solving our housing shortage and improving quality, and for delivering the mix of different homes that meet the growing and changing need of communities.

For this to happen, the LGA said councils need to be able to borrow to build and to keep 100 per cent of the receipts of any home they sell to reinvest in new and existing housing.

Cllr Judith Blake, LGA Housing spokesperson, said “Our country’s failure to build enough homes over the past few decades is putting huge pressure on our existing housing stock.

“Families are having to spend more on rent or mortgages every month and deserve a decent home that is affordable. But as costs are rising, so is dissatisfaction with the standards of new homes.

“Everyone deserves an affordable and decent place to live. It’s crucial that all new and existing homes are up to a decent standard.

“Councils need to be able to ensure quality through the planning system, and to encourage high standards in rented and owned properties across the board.

“To spark a desperately-needed renaissance in council housebuilding, councils also need to able to borrow to build new homes and keep all receipts from any homes they sell to reinvest in building new homes that are of a good quality and affordable.”

New plans set out by the Department for Transport will revolutionise British infrastructure and boost the construction sector’s productivity in a move that could generate savings of £15 billion a year.

The plans were revealed alongside the National Infrastructure and Construction Pipeline, which sets out projects for the next 10 years.

This £600 billion pipeline includes both public and private investment. It will give certainty to industry that there is great appetite to develop infrastructure and will encourage the sector to invest in the right technology and skills to meet this demand.

The Transforming Infrastructure Performance programme sets out how the government will ensure these projects are delivered swiftly and efficiently. It contains ambitious plans to transform infrastructure delivery over the long-term, using the government’s influence to drive modern methods of construction so Britain can lead the world in high-tech building. The Transport Infrastructure Efficiency Strategy sets out how these lessons will be applied to drive efficiency and productivity in transport.

Andrew Jones MP, Exchequer Secretary to the Treasury, said “We are backing Britain with a record amount of infrastructure investment as we build an economy fit for the future. That’s why we’re working with the industry to skill up and scale up for the challenges ahead.

“Investing in infrastructure boosts productivity for the economy as a whole. The scale of the investment we are talking about here will deliver a step change for our country.”

Transport Secretary Chris Grayling said added “We’re undertaking the most ambitious improvements in our transport network this country has seen for decades. But we must also drive forward plans to ensure these infrastructure projects are completed on time and on budget.

“World-leading projects such as Crossrail, the Ordsall Chord and the huge investment programme in our major roads show that Britain can deliver on time and on budget, boosting jobs and growth and creating new opportunities across the nation. But we want to do better. This strategy shows the way and sets out our standards for how we will do more and better in future.”

The government is a major player in construction and delivers many projects every year, such as transport, schools, prisons and hospitals. This accounts for a quarter of all construction projects, and using this purchasing power will enable ministers to drive innovation and encourage firms to invest in modern methods and technology.

Methods such as off-site manufacturing, where projects are part-constructed before being assembled on location, can boost productivity by reducing waste by 90% and speed up delivery times by more than half (60%). For example, a school that typically takes a year to build could be done in just over 4 months.

The announcements tackle this head on and give the sector the certainty to start investing in the right technology and skills.

Tony Meggs, Chief Executive of the Infrastructure and Projects Authority (IPA), said “Publishing our Transforming Infrastructure Performance (TIP) programme demonstrates our commitment to tackling the annual £15 billion productivity gap in construction. The IPA has a significant role to play in helping to create a more productive and innovative sector.

“We want to maintain confidence in the sector and will work alongside industry, using our purchasing power to drive the adoption of modern methods of construction in both new and existing infrastructure. The scale of ambition is great but by aligning our initiatives we can work with industry to deliver transformation for the sector.”

Andrew Wolstenholme, Co-Chair of the Construction Leadership Council (CLC), said “The Transforming Infrastructure Performance programme presents a huge opportunity for the industry and government to reap the economic gains from improving productivity during the delivery of the UK’s £600 billion infrastructure pipeline. Transport is a huge part of that.

“I am delighted that the IPA, DfT and CLC are working closely to encourage construction clients to procure on the basis of whole life value, deliver more industry led innovation, develop the skills we need for the future and give the UK a competitive advantage in exporting new technologies and expertise. I am proud to chair the Transport Infrastructure Efficiency Taskforce which will ensure these strategies are brought to life across the transport sector.

“It all adds up to better economic and social infrastructure, as well as more homes, delivered quicker, at better value and more sustainably than ever before, underpinning the UK’s growth and providing jobs all over the UK.”

 

A new £25 million fund has been launched to help local authorities to deliver the high quality, well designed homes that this country needs.

Housing and Planning Minister Alok Sharma this week announced that the Planning Delivery Fund is now open for bids and will support ambitious local authorities and third sector organisations in areas of high housing need to plan for new homes and infrastructure.

Initially opening up £11 million of the fund, councils will be able to apply to help gain the skills or capacity they need to deliver high quality housing growth at scale, pace and implement wider planning reforms. The fund is aimed at encouraging more innovation in the design quality of new housing developments, as well as provide design advice and support to local authorities.

As part of the government’s plans to raise housing supply to 300,000 per year on average by the mid-2020s, a package of measure has been announced to boost local authority planning capacity, support councils to take a proactive role in planning and encourage ambition and leadership in the delivery of new communities.

Others measures announced along with the £25 million Planning Delivery Fund include:

  • a further £3 million funding to support the delivery of the 14 garden villages that are part of the government’s existing programme
  • publishing a consultation on plans to allow the creation of locally led New Town Development Corporations, and help speed up the delivery of new garden towns

Housing and Planning Minister Alok Sharma said “Locally-led developments have enormous potential to deliver the scale and quality of housing growth that we need. By supporting our local authorities, we will be able to unlock more homes where people want to live.

“These measures including the £25 million of government support which will help develop new communities that will not only help deliver high-quality well-designed homes, but will also bring new jobs and facilities and a boost to local economies.”

Across England, the government is currently supporting 24 locally-led garden cities, towns and villages, which have the potential to deliver around 220,000 homes.

Backed by £16 million funding, a further £3 million has been allocated to 14 garden villages in the programme to fund dedicated staff and studies and assessments that are vital to the delivery of garden villages that are key to successful delivery.

The government’s housing white paper in February 2017 committed to the creation of New Town Development Corporations, which would be overseen by the local authority or authorities covering the area proposed for a new garden community, rather than by Whitehall. Government is now seeking views on this proposal.

Glenigan expects the value of construction starts to stabilise in 2018, after the declines seen over the last two years, as construction clients adapt their investment plans to the changing political and economic environment.

Commenting on the prospects for the industry, Glenigan’s Economics Director, Allan Wilén said “The value of underlying construction projects has fallen back this year amid continued political and economic uncertainty, delays to public sector projects and a weakening in housing market activity.”

“Whilst a weak UK economy is forecast to constrain construction activity over the coming year, we anticipate greater stability in overall construction starts as strong growth in hotel and leisure, industrial and education work help offsets weakness elsewhere.”

“The industrial sector is forecast to be a growth area as technological and social changes reshape consumers’ retail habits and drive the demand for logistics space. We expect these structural changes to be a long term driver for warehousing and logistics projects as online retailing takes an ever larger share of retail sales and as retailers adapt to changing spending patterns and shopping habits. The Midlands, North West and parts of the South East of England are favoured locations for such facilities, offering good access to national transport networks and the UK’s major population centres.”

“The hotel & leisure is also forecast to be a growth sector over the coming year. Consumer spending on leisure activities remains firm and the sector is benefiting from the depreciation in the pound over the last two years which has boosted UK tourism and encouraged UK consumers to holiday at home.”

“Demographic changes are set to shape the pattern of construction activity. Increased investment is anticipated to expand the secondary school estate in order to accommodate rising pupil numbers, especially in the UK’s major conurbations. In addition universities are investing in new facilities as they compete for UK and overseas students.”
“Growth in these areas will help offset weakness in the private housing and office sectors.”

“Real household earnings growth has stalled due to weak wage growth and higher inflation. This is forecast to slow housing market activity, with weak new house sales holding back sector activity. The value of private housing projects starting on site is forecast to drop 3% next year as housebuilders prioritise building out current developments and open fewer sites.”

“Political and economic concerns arising from the EU referendum depressed office project starts during 2016 and 2017. These concerns are expected to persist as investors appraise the implications of Brexit and of slower UK economic growth for the demand for office space and rental values. Developments in the City of London and Docklands will be especially vulnerable with weaker demand for accommodation as financial institutions consider relocating operations to elsewhere within the EU.”

“Major infrastructure schemes, including, Thames Tideway, HS2 and Hinckley Point, are forecast to drive civil engineering activity next year. The value of smaller scale projects starting on site have fallen back sharply this year and are expected to weaken further in 2018 as investment is dominated by flagship projects.”

GLENIGAN

A full copy of the Glenigan Outlook Forecast is available to download here.