Despite the series of negative stories, the glass may finally be looking half full again for the sector
Whisper it but there’s some economic optimism in the air. Flick through our news section on some weeks and you can be forgiven for being sick of all the negative stories. Anyone would think we were doom mongering.
But of course, we’re just reporting what’s out there. As we went to press this week, Carillion’s collapse was being scrutinised by MPs in a course of events that have put thousands of jobs at risk, and there’s no getting away from that. Construction’s stagnation is very public too. It becomes tiring to hear negative quarterly output statistics making the headlines on News at Ten and billed as a handbrake on the UK’s economic growth compared with say, the manufacturing sector. And while we’re all sick of citing “Brexit uncertainty” as some kind of trading indicator, the one certainty is that our inevitable separation from the EU – and the ongoing political paralysis – feels bad.
So why is the glass now looking vaguely half full again? Well, it’s not just because former PM David Cameron is saying that Brexit is not as bad as he thought it was going to be – “a mistake, not a disaster”. Deloitte’s latest London Office Crane survey is telling us as much.
It becomes tiring to hear negative quarterly output statistics making the headlines on News at Ten and billed as a handbrake on the UK’s economic growth compared with say, the manufacturing sector
The consultant reports record activity in regional city centres – and notably in the residential sector. The number of residential units under construction in Leeds, for example, is at its highest in a decade, reflecting renewed investor confidence. And Barratt alone will build over 2,000 homes in Scotland this year.
But that’s not all. Architects are on the march too with levels of confidence for future work bouncing back. The RIBA’s monthly survey revealed sentiment rising following post-Brexit referendum blues and now only 13% of architects say they are under-employed. That’s surely an indication of hope.
Housebuilders, meanwhile, are finally getting their act together to deliver in the biggest growth market of all. It’s never made sense, given the scale of demand in the housing sector, that construction’s overall output should be lagging. But led by smart entrepreneurs, what is now being coined as the “quick build” solution of modular homes is being adopted at scale.
Modular builds offer a way to plug the housing gap. But only, of course, if they don’t look crap
According to Lloyds Bank’s recent survey of 100 housebuilders nearly 70% of them are investing in modular systems with over half investing in off-site panelised systems. It’s a no brainer decision that comes with a return on better construction standards, ease of build, favourable planning considerations and, of course, higher margins. And with a third of housebuilders citing skills shortages in the very cities that Deloitte claims are now booming, then modular builds offer a way to plug that gap. But only, of course, if they don’t look crap.
This remains the design challenge, preventing a generation of poorly designed, cheap looking blocks that are thrown together to satisfy demand and keep government ministers happy in meeting targets. But that’s one for another day.
For now, design aside, from a commercial point of view, it’s difficult to fathom why a modular housing boom isn’t happening faster. Especially when the government has committed to building 300,000 homes a year by the mid-2020s with a £44bn investment.
And if you’re still not convinced, you’ve only got to see where Tony Pidgley is putting his money – Berkeley Homes this week received planning permission for a modular homes factory in Ebbsfleet, Kent, capable of producing more than 1,000 homes each year. The potential is overwhelming and if you ever want to see where real innovation lies in the housing sector, this is it.
Design aside, from a commercial point of view, it’s difficult to fathom why a modular housing boom isn’t happening faster
Still not convinced? Need your fix of gloom? Well, we’ve got plenty of coverage both in the magazine and online on the demise of Carillion and Lakesmere and the likely next corporate disaster.
Or should you be looking to understand the intricacies of the decline in the commercial office sector in, say, Grimsby, we can do that too. But for a moment, if you can, step back from the cataclysmic events rocking the UK procurement chain and try to be positive.
For every threat, there is an opportunity. And the opportunities, notably in the regions and off-site manufacturing, are growing day by day.
Tom Broughton, editor-in-chief / group director, Building