“As I alluded in my recent opinion piece (The South – Typical of UK or isolated success story?), the current news gives a pretty gloomy overview of where we are as a nation.
In my opinion piece, I highlighted a few negative points coming from the construction industry, including:
- The latest bellwether IHS Markit/CIPS UK Construction Total Activity Index posted 43.3 in September – down from 45.0 recorded in August where anything below 50 represents contraction.
- The drop was the second-strongest since April 2009 and broad-based across all three categories of construction work.
- Commercial activity was the worst-performing segment while civil engineering activity dropped at its sharpest rate for close to a decade while residential building recorded a fourth successive monthly fall.
However, I don’t feel that the predictions for 2020 will be all doom and gloom. We also still don’t know when the UK will leave the EU, or if it will happen at all, so we cannot accurately forecast what effect Brexit will have on the UK construction industry.
With the possibility of a new government on the horizon, we don’t know if it will be a strong government that will be able to resolve Brexit sensibly and actually get things done.
We may end up with yet another small majority/minority government much like the current one that tries to pick its way through the Brexit minefield and gets continually bogged down in argument and political fallout and achieves little to zero progress.
We cannot say whether the country will go back to the 1970s with a hard left labour government implementing a 4-day working week, or whether we will end up becoming the ‘Singapore’ on the EU’s doorstep, a booming free-market economy with trade deals being brokered with partners across the globe.
No matter what opinion you may have about this, the one thing most people I speak to in the industry all agree on is that the country needs a level of certainty to build upon.
People need to have enough confidence in what is going to happen in the future to be able to open their chequebooks without hesitation to sign off on their projects, not only for the benefit of their own businesses but for the country as a whole with the jobs and opportunties they will be creating.
There is no doubt that massive investment is needed in the construction industry. We also understand that we need to take action to decarbonise our society. This includes adopting new technologies such as smart meters, green energy and electric cars.
There is little doubt that there is a going to be a green industrial revolution happening over the next 20 years. This is not only great for the future of our planet, but it will also be great for the construction industry as many thousands of new jobs will need to be created moving forward.
So, how does this affect Skilled Labour Services (Southern) and our plans for 2020, you may ask?
Well, we plan to move forward taking a sensible approach to growing slowly and steadily in a managed and controlled way over the coming year.
According to the Construction Products Association (CPA) in their report: Construction Forecasts Revised Down Due to Prolonged Brexit Uncertainty, they predict that: “Growth of 1.4% is forecast for 2020, largely driven by activity on major infrastructure projects but also supported by sharp increases in warehouses and ports activity.”
And also from the same report: “The infrastructure sector is expected to experience the strongest growth rates across the forecast period, with growth of 9.3% forecast for 2019 and 9.7% for 2020 even with caution regarding government’s ability to deliver on major infrastructure projects such as Crossrail and HS2. Without this infrastructure growth, the construction industry would experience a 1.8% fall in 2019, followed by two years of stagnation.”
As Skilled Labour Services (Southern) operate within a huge marketplace, we only need a very small slice of it to be successful. This means that we can afford to ignore the macro noise to a large degree.
During 2020, we will aim to continue growing our client base by making the most of opportunities as they present themselves. We will continue to focus on strengthening our operational delivery, on further improving our reliability, growing our authority in this sector, and on upskilling those that work for us.
In short, we will continue doing those same things that have served us so well during 2019.”
Richard Allen, Managing Director of Skilled Labour Services (Southern) Ltd