Times have been tough for some Builders in London, the economic climate has downsized a lot of projects or killed them completely!
After reading an interesting interview with Bill Phelps, we decided to outline some of the predicted trends for 2013...
Some lucky companies in London benefited from what can be seen as an Olympics boom, and as to be expected in the completion of the venus, infrastructure etc, there was a drop in the number of roles available. Public Sector cutback have also deepened the sorrows which are going to be felt throughout the industry.
With a predicted fall in output "estimated as high as 12 per cent" 2013 could be a much less fruitful year than some public figures would have us believe.
The UK economy is barely out of recession and there is a looming likelihood of slipping back in getting ever closer, industry tender prices are still flat-lining, and will continue in that vein well into 2013.
Bill thinks that a "further weakening of workload of two per cent for the first two quarters of next year looks likely".
Unfortunately this trend looks set to continue, as Builders in London compete for a market share that continues to shrink.
Tender prices have Dropped by over 10% since 2007,
Even in a recovering economy prices will tend to remain low and competition will be fierce.
"Q4 2012 capped the longest decline in business since the beginning of the financial crisis in 2008."
The costs of fuel and energy rising will also contribute to the relatively grey outlook for some builders in London, not to mention the ever dreaded budget cuts.
It's not all doom and gloom however, as eventually, competition will ease.
Builders or Contractors specialising in Refurbishments and Maintenance may find the going a little easier as business remains steady with clever landlords & property owners making sure to keep their properties pristine in order to maintain asset value.
We may see a significant number of Property Developers and Local Authorities make efforts to rationalise their portfolios in order to make certain their it benefits them in a more effective manner.
It’ is now a well discussed point that London is the anomaly to the national trends, and in the residential sector, especially so. This may be related to the demand from overseas which in turn keeps some prices high & construction demand ,(in some sectors) strong.
For the rest of the UK, things are starting to look up also, with mortgage approvals on the increase and 'reports' (at least) that banks are beginning to ease lending restrictions. (no...really)
So, are we to look at this information as an indicator that the residential market will pick up throughout 2013 and 2014?
Well... reportedly, yes. (although nowhere near the levels of the 1998-2007 boom.)
If we are to base our predictions solely on fact, we can not expect long-term growth to fully recover until 2017 and even then it is unlikely to pre-recession levels by then, however growth levels should have stabilised and be well established by the seemingly distant date..
So is there anything look forward to?
Well, not many predictions are perfect but experts say we should expect more noticeable signs of improvement from 2014 onwards, with workload improving, due to rising tender prices, and contractors attempt to rebuild their margins.“I think the industry has changed forever and only a new banking and lending paradigm, coupled with a radical overhaul of the planning system and concomitant further elimination of small business bureaucracy, can stimulate our business and property development industries to anything like their former potential. I believe that SMEs are the backbone of the British economy, which is why I want to help maximise their growth.”Bill Phelps
So is this a chance to shake up the way we do things? Is it time to call for more supportive, nurturing infrastructure from the government and financial systems which take so much from SME's and Sole Traders?
It has been said that adversity breeds innovation and now is a time when Builders in London as well as larger companies need to a lot more innovative, there is record growth in some marginal areas of the construction industry, which are quickly becoming a lot more mainstream, such as green construction specialists and companies that are carbon neutral. Unique Selling Points such as this may help to set your business ahead of the competition in the eyes of a growing number of ecologically aware investors and buyers.
These are just a few points I felt were worth highlighting and a questions worth raising?
If you work in the construction industry in London, or have any comments or questions please feel free to chip in your tuppence.
