Happy new year. And indeed there’s much to be happy about in 2007.
But a bumper workload, new rules and an ever more complicated industry will bring their own challenges. So here’s our 30-second guide to the next 12 months.
Workload With the economy stable and house prices rising, the picture for construction looks rosy in 2007. Experian is predicting output growth of 2.5%, thanks mainly to infrastructure and offices (page 18). The fly in the ointment is repair and maintenance. An unintended consequence of Building Schools for the Future has been to discourage heads from investing in their buildings, and much of the NHS hasn’t got the money to spend on its. Of course, success brings its own problems, principally the Herculean task of getting someone to do all the work. We can only hope that the RICS is successful in lobbying for a change in visa rules. Maybe clients will need to resurrect talks with EU firms – could the likes of Bouygues finally become mainstream contractors?
Environment This will be the year when regulation really starts to bite: the Code for Sustainable Homes will add 5% to the construction costs for social dwellings, home information packs will be in force by July and zero-rated stamp duty will kick in for zero-carbon homes. There are also likely to be more incentives to improve existing stock – our 99% campaign will demand them.
Government The lack of construction folk in the New Year’s Honours was a reminder that the industry does not make much of a blip on the government’s radar. We can only hope that Gordon Brown’s plan to create a Department for Economic Affairs will bring construction closer to the Treasury. So, a return to construction for Nigel Griffiths, a well known Brownite?
PFI After a shaky year, 2007 looks a little brighter here. The recent move to reimburse bid costs on cancelled schemes and the establishment of project delivery organisations will freshen up the market.
Corporate Expect yet more consolidation. Amec will sell off its built environment interests promptly, but will struggle to sell its building and civil engineering arm. Jarvis is a target for those looking to strengthen their rail businesses, such as Kier or Skanska, and Barratt will try to leapfrog Persimmon with a big acquisition. And on the consultancy side, the traditional QSs will continue to emulate the model set by the big accountancy firms by merging with each other. Davis Langdon Harris – now that would be a headline.
Olympics We’re due to get a headline cost figure, and see a host of contracts out for grabs. Expect Foster to team up with a major contractor – possibly Balfour Beatty – to add a bid for the velodrome and the media centre.
Denise Chevin, editor