Trade delegations to lucrative markets abroad are great PR for politicians but to sure up this tentative recovery the focus has to be on activity in the UK
The summer may be passing quickly, but, for many people returning to offices and sites after the August lull, December still seems like a distant prospect. It’s a different story at UK Trade & Investment (UKTI), however, which last week opened applications for its latest construction-related trade mission to Brazil, due to take place just before the end of the year.
The government has, over the last two years, been extremely keen to push the opportunities for UK companies in the south American host nation of the next Olympics, not least for construction firms. The chance to use the successful delivery of the 2012 Games as a bidding advantage has been repeatedly trumpeted by both UKTI and the high level ministers - David Cameron included - who have accompanied these missions. With 2% annual construction growth forecast each year until 2025, and an infrastructure pipeline in excess of £335bn, it’s easy to see the market’s appeal. And the ability for officials to relay this - and their own involvement - to those back home has no doubt been enhanced by the media’s enthusiasm for an exotic setting.
However, as much as Brazil has provided welcome work for a handful of UK companies, the industry should not get carried away with the scale of the opportunity on offer. We report in news and in our feature that UKTI believes that only around £39m of construction work on the 2016 Olympics and 2014 World Cup has gone to UK firms, with breakthroughs into the wider market also much more sedate than storming.
Opportunities in individual overseas markets usually represent a fraction of the overall output of the UK construction sector as a whole
Of course, for those firms who have been successful, this work has the potential to provide a valuable platform for the future, particularly in a market that is crying out for expertise in large scale masterplanning and sustainable construction. Much like opportunities on individual glamour projects - including the 2012 Olympics - the value to the companies involved lies predominantly in the onward opportunities they have the ability to create, which is the reward for the financial and reputational risk involved in going there in the first place.
For these reasons, markets like Brazil remain important for companies in the recession-ravaged UK sector to consider. It’s also fair to say that UKTI is undoubtedly playing its part in advancing the interests of those companies that do decide to try to gain a foothold, and that, given the barriers to entry in Brazil, and the native construction capability in that market, it would have been hard to genuinely believe that much more could have been achieved.
And that is the crucial point here. Opportunities in individual overseas markets usually represent a fraction of the overall output of the UK construction sector as a whole - the £39m of work won on those two Brazilian megaprojects, for example, is equivalent to only one fifth of the cost of Birmingham’s newly completed library, our featured project this week. But this fact is often lost among the deluge of publicity that accompanies those government-led delegations abroad.
If a minister putting in some appearances in sunnier climes can advance the cause of even a handful of British construction firms, then all well and good. But, as we enter September and the party conference season, the spin around such missions should not be allowed to detract from the fact that the vast bulk of the UK industry is still reliant on real government support closer to home to turn the tentative signs of recovery that we are experiencing into a stable reality.
Sarah Richardson, editor