Archive for category: General News

Key findings

New order growth eases to five-month low

All three monitored segments record softer rises in activity

Second-fastest rise in input prices amid severe supply chain disruption

_{Data were collected 12-27 August 2021.}

UK construction companies signalled a further increase in output volumes during August, however the pace of growth eased notably from the previous survey period. There were softer expansions across housebuilding, commercial work and civil engineering activity as well as in new order growth. Moreover, companies widely noted sustained, and severe, supply chain disruption in August, which contributed to an accelerated rise in input prices, and one that was the second sharpest in the history of the survey.

The headline seasonally adjusted IHS Markit/CIPS UK Construction PMI® Total Activity Index posted 55.2 in August, down from 58.7 in July, indicating activity has expanded in each of the last seven months. That said, the rate of increase eased to the softest since February as restricted supply of materials and transport began to weigh on overall construction activity.

Commercial work (index at 56.0) was the best performing broad category of construction output in August, though the rate of expansion eased to the slowest for six months. This was followed closely by housebuilding (55.0), while civil engineering remained the slowest growing subsector (54.8) for the fourth month in a row.

Total new work increased for the fifteenth consecutive month in August. While the latest improvement in order books was marked overall, the rate of growth softened to the weakest since March. Businesses noted a continued resumption of projects that had been delayed due to Brexit and the COVID-19 pandemic, though client confidence was dampened by volatility in raw material supplies and increased cost burdens.

Amid softer growth in new orders, the rate of job creation eased to a four-month low in the latest survey period. Firms continued to note that strong market conditions had sustained demand for new employees, though additional cost burdens and a lack of skilled workers began to weigh on the rate of hiring.

Input buying expanded at the slowest pace since January. Strong rises in demand for construction materials continued to stretch supply chains however, as some firms noted difficulty in sourcing and receiving purchased inputs. This occurred as supplier delivery times continued to lengthen at a substantial rate, though one that was slightly improved from June’s record deterioration. Anecdotal evidence suggested that ongoing material shortages were exacerbated by a lack of transport and freight availability, compounding existing issues related to the supply of materials due to port congestions and demand and supply imbalances.

As a result, input cost inflation accelerated to the second-fastest rate in the 24-year history of the survey, surpassed only by the record rise two months prior. Among those materials reported as up in price, the most common were concrete, fuel steel and timber.

Looking ahead, construction companies remained highly upbeat about their growth prospects over the coming 12 months. Positive sentiment was underpinned by hopes of an expected rise in new contract awards across all subsectors of construction.

Comment

Usamah Bhatti, Economist at IHS Markit, which compiles the survey said:

“Evidence that the UK construction sector began to feel the impact of ongoing supply chain disruption was widespread midway through the third quarter of 2021. Growth rates for overall activity as well as the three monitored subsectors eased further from the recent highs earlier in the summer.

Similarly, new business inflows have continued to increase at a marked pace, yet even here the rate of growth has eased to a five-month low.

“Supply chain disruption continued to disrupt activity across the UK construction sector, as demand for materials and logistics capacity outstripped supply. Average vendor performance continued to deteriorate at a near-survey record rate, as firms noted severe shortages of building materials, a lack of available transport capacity and long wait times for items from abroad due to port congestion.

“As a result, the rate of input cost inflation faced by construction companies accelerated to the second-fastest on record, while the increase in subcontractor rates hit a fresh series high, fuelled by supply shortfalls in the sector. Despite this, businesses noted a stronger degree of optimism regarding the year-ahead outlook, as more than half of survey respondents predicted a rise in activity. This was underpinned by expectations that new contracts would be brought to tender across the construction sector as markets continued to recover from the economic disruption caused by the pandemic.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said:

“Formidable supply chain pressures restrained purchasing activity and building projects across the board in August as 68% of construction companies reported even longer delivery times for materials compared to July. A combination of ongoing covid restrictions, Brexit delays and shipping hold-ups were responsible as builders were unable to complete some of the pipelines of work knocking on their door.

“Material and staff costs went through the roof as job hiring accelerated to fill the gaps in capacity left behind by employee moves, overseas worker availability and brought on by skills shortages. Paying higher wages for experienced staff along with low stocks of materials at suppliers meant inflationary pressure rose at a rate almost on a par with June’s survey record. 84% of supply chain managers reported paying more for their purchases.

“These obstacles to construction’s progress are set to continue and are now affecting last year’s strongest performer – house building, which will exacerbate the problem of housing supply. However optimism improved on last month as more than half of building firms believe that output will continue to rise in the

year ahead.”

Fraser Johns, finance director at Beard, said:

“Today’s stats really underline the concerns expressed at the start of the year that the supply chain issues would undermine the post-pandemic recovery in construction.

“With the slowest level of growth in five months and now client confidence dampening as a result of the uncertainty over supplies, it feels a long way from the wave of optimism felt at the end of 2020 and into Q1 this year.

“It puts real emphasis once again on relations with supply chains – ensuring prompt payment for example – and requires a proactive approach in terms of multi-stage procurement and working more closely with customers to keep them well informed about the situation.

“We don’t look to be turning a corner any time soon on the supply crisis, so it’s key for the industry to pull together and collaborate right through the supply chain to try to lessen the impact of these issues.”

‘. . . . . Insane ambition but thats actually what the planet needs if we are

going to solve the climate problem’

Ian Scott, Moltex

Moltex Energy is excited to be featured in the BBC Radio 4 podcast 39 Ways to Save the Planet, with hosts Tom Heap and Dr. Tamsin Edwards.

The podcast, which is presented in partnership with the Royal Geographical Society, presents 39 ways of relieving the stress that climate change is exerting on the planet.

Moltex founder and chief scientist Ian Scott appears in the September 3 episode ‘New Nuclear’, explaining how the company’s innovative molten salt reactors, which produce clean, reliable, low-cost energy, can play a significant role in global emissions reductions.

“Moltex exists for the purpose of solving climate change, and we believe the only way of succeeding is by making clean energy less expensive than fossil fuels,” said Ian Scott. “This is what led us to molten salt reactors, which are smaller, simpler and safer than conventional nuclear reactors, and therefore much less expensive to build and operate.”

Moltex has a project to demonstrate its technology in New Brunswick, Canada. In 2018, the company was selected by NB Power and the Government of New Brunswick from among 90 nuclear vendors to develop its reactor in the region, with the goal of deploying a first-of-a-kind unit next to NB Power’s existing CANDU 6 reactor.

Recently, Moltex received over $50 million from the Government of Canada to continue its research and development. The company has also received financial support from the UK and US governments, research partners and private investors.

The market for Moltex reactors is large and growing as energy demand around the world increases. If successful in rolling out reactors on a large scale, Moltex will indeed help save the planet.

About Moltex:

Moltex is a privately held company striving to solve the world’s most critical challenge: providing sufficient clean, reliable and affordable energy. In collaboration with innovators and energy experts, the company is developing a small modular reactor that will help keep fossil fuels in the ground. Moltex was selected by NB Power and the Government of New Brunswick to progress development of its reactor technology in New Brunswick, Canada, with the goal of deploying its first reactor next to the Point Lepreau Nuclear Generating Station. 

www.moltexenergy.com

A new partnership between Preston City Council and Calico Enterprise Ltd has been given cabinet approval to ensure developers create demonstrable impact in local communities by using local suppliers and creating skills, training and employment opportunities for local people.

The partnership will provide an innovative end-to-end process for the implementation and monitoring of the Central Lancashire Employment and Skills Supplementary Planning Document (SPD) – introduced with the aim of generating significant ‘added value’ benefits to the residents of Lancashire.

Preston City Council will use planning conditions to ensure that major construction activity delivers real benefit to local suppliers and residents. Calico Enterprise Ltd, part of the Calico Group, will provide the Council with additional resources, expertise and experience to ensure the outcomes are achieved and reported back to the council.

Calico Enterprise Ltd will use their extensive experience and long-standing relationships with construction companies, training providers, DWP and local charities to ensure all parties work together to maximum social value for local people.

Jane Smith, Partnership Manager at Calico Enterprise Ltd said, “We have worked extensively with Preston City Council to support them to use their planning powers to create opportunities for local people. We are delighted that we have now received the go ahead from cabinet to ensure that local supply chains and residents benefit from the opportunities that major construction developments can bring.

As a company, we’re committed to creating genuine opportunities for local people to gain skills and access employment. This service will help ensure that developers meet their commitments to creating these opportunities and achieve maximum impact in their communities.”

Councillor David Borrow, Cabinet member for planning and regulation, added, “We’re very happy to be working with Calico on this new partnership and we welcome their support and expertise in this important aspect of demonstrating responsible planning and development.

“Fundamentally, this will help with addressing the national skills shortage across the country by ensuring that developers in this region work with local employers and training providers on specific skill sets and training, and to consider creating apprenticeships.”

Detailed planning permission for first phase of a new neighbourhood at Almond Valley, Perthshire is approved

A detailed planning application submitted by Savills on behalf of Almond Valley Limited and Stewart Milne Homes has been granted consent by Perth & Kinross Council at Committee on 24^th August 2021.  This will enable 340 homes, of which 85 will be affordable, as well as supporting road infrastructure to be delivered in the first phase of a new neighbourhood at Almond Valley to the north-west of Perth.

The planning consent also provides for a new local centre including commercial units and leisure facilities with sports pitches, a changing pavilion, extensive open space and new play areas.

The approved wider masterplan allows for up to 1,500 houses to be built in due course and is an important element of the planned growth of Perth.

Alastair Wood of Savills said:  “The decision to grant this detailed consent is really positive news and is the result of a significant amount of work which has been undertaken with the local authority, key stakeholders and the community council over a long period of time to set out the details of the initial phase of development.  We will continue to work with council officers, local residents and key stakeholders in order to deliver the best possible start to the Almond Valley neighbourhood.

“Almond Valley Ltd. is intent on providing an attractive, design-led neighbourhood which takes account of the local landscape with a focus on open spaces and woodland and the creation of new foot and cycle paths.”

Savills Development team has been marketing the Phase 1 site and a preferred bidder is expected to be appointed in early course.

BUILDING UP STEAM – CONSTRUCTION SECTOR WAGES RISE EIGHT TIMES FASTER THAN AVERAGE SALARIES

• Construction salaries advertised by employers have soared by 6.7% in the space of just five months¹, according to new data from the world’s largest job site Indeed 
• With employer demand for workers outstripping the number of candidates, advertised wages are also rising fast in driving jobs (up 5.7%) and in manufacturing roles (up 4.8%)
• Wage growth is accelerating as jobseekers’ interest in food sector jobs has slumped by 57% and in construction jobs by 27% 

High demand for workers in the construction, transport, manufacturing and food industries means wage growth in those sectors is far outstripping that in the rest of the UK economy¹, new research from the world’s largest job site Indeed and the Central Bank of Ireland shows.

Average advertised salaries in construction, which has seen the highest salary growth over the past five months, rose by 6.7% between February and July. That’s more than eight times the 0.8% average recorded for all jobs. 

Salaries for driving jobs are also up strongly (5.7%), while manufacturing sector wages have risen by 4.8% and food preparation and service jobs are paying 3.7% more than they did in February when the UK Government announced its ‘roadmap’ out of lockdown.

The sectors recording the biggest salary increases are those in which employers’ need for extra staff, and thus the number of job postings, have risen rapidly as lockdown restrictions eased, but where the supply of candidates has not kept pace with demand.

Chart: Occupations with the fastest growth in job postings this year

Between February’s roadmap announcement and England’s so-called ‘Freedom Day’ in July, UK-wide job postings grew 83%, smashing through pre-pandemic levels. Overall, job postings now stand 21% above their pre-pandemic level.

The sectors seeing the fastest growth in postings include cleaning and sanitation, customer service, driving, food preparation and service, loading and stocking, and retail. 

However, this demand is not being fully met as the number of clicks from jobseekers per posting has fallen by 52% for food preparation and service roles, 37% in cleaning and sanitation and 30% for loading and stocking jobs. Candidate clicks on construction jobs have also dropped by 27%².

Table: Posted wages have grown in occupations where clicks have fallen

Pawel Adrjan, head of EMEA research at the global job site, Indeed, comments: “Hiring bottlenecks are driving up wages in some sectors of the economy as employers use pay as an incentive to attract candidates and beat their competition to the best people.

“Historically, low interest in jobs has always translated into increased salaries, but what is unusual about the 2021 recovery is that demand for workers increased suddenly, coinciding with the re-opening of the economy – and employers appear to have responded swiftly.

“However, the surge in advertised salaries is limited to a few specific sectors which have a severe shortage of candidates. Elsewhere in the economy, wage growth is much more modest as the labour market still has not recovered fully.”

Reamonn Lydon, senior advisor at the Central Bank of Ireland, added: “Understanding which sectors of the economy are seeing the fastest growth in wages, and why, is important for central banks as they monitor inflation dynamics. 

“Our research shows that wages are growing faster in sectors where employers are finding it harder to get workers – in construction, driving, food services, manufacturing and cleaning and sanitation.”