Wednesday, 13 December 2017

Become a better Sales person by working with Operations

You can become a much better Sales person if you start working with, rather than against Operations. It is often not the fault of the Salesperson that unrealistic promises are being made to the customer. This is where communication, education and understanding are important.

The role of the Sales Director is vital to ensure that his or her team understands the policies and procedures of the company, as well as the benefit of the increased communication with Operations. If they do not accept a culture of working together then it will fail, if they do the results will be very rewarding.

It also brings up the subject of recruitment and employing the right kind of person. If you can find the right team members who can adapt to this environment, then they will be very successful and reap the financial and personal benefits.

We have developed a list of requirements and attitudes, which we believe is a useful blueprint to ensure that Sales can benefit and maximise their relationship with Operations. If you really want to set yourself apart from other salespeople, this approach is essential reading.

How to lead the way in Sales by enhancing your relationship with Operations
  • Understand your route to market
  • Understand what your company can achieve
  • Feed back information from the customer to Sales/Operations about how you can improve on an on-going basis
  • Know your customers well
  • Communicate to all your customers and your colleagues
  • Remember that your customer is not the only customer in the company
  • Be a team player and respect other departments
  • Realise that the Production and Warehouse staff are on your side and your relationship with them is important – build it and they will support you, destroy it and you will not be supported
  • Understand what is involved in preparing an order, system difficulties and processes and ensure you are aware of manufacturing lead times, dispatch slots, packing time (including products that need to be assembled), transport implications and possible surcharge costs
  • Considering spending some time working in the warehouse
  • Be aware that the wrong kind of pressure can create errors (e.g. Warehouse staff pack without care) and more of a problem than you had in the first place
  • Understand your standard lead-times and procedures and don’t make decisions that you have no basis or authority to make
  • Don’t lie: ask, check and seek advice and then go back to the customer with an informed solution
  • Good customers are long-term customers. Don’t over-promise so that all the stops have to be pulled out on every occasion, it will only lead to letting them down. A customer wants a reliable and trustworthy partner that keeps their promises and meets their needs
The benefits of a having a close Sales and Operations team
The perfect team is a Sales group who follows through until delivery, and an Operations group who supports the Sales group throughout the whole sales cycle. One team, one goal providing the following benefits:
  • A company that customers view as ‘reliable & trustworthy’ and come back to
  • A company which has everyone working in the same direction
  • A company where people want to help and support each other and show loyalty
  • A company which has fewer headaches and problems to deal with internally and can concentrate on selling and growing
  • A company with quality and customer service at the heart of their culture
  • A company with a structure and ethos in place that means the system will work even when people leave
  • A company that knows their customers and communicates with them
The whole company needs to find out what the needs of the customer are and then deliver it to them to give you meaningful competitive advantage.

You can really flourish by bringing these key factors into your everyday approach, but everyone needs to support each other for short and long-term improvement. It is vital that you aim high and deliver even higher.

The challenges that Sales and Operations face need to be overcome by working together in order to meet customers’ needs.

Who should drive this change?
One person cannot make this change happen, but everyone will benefit when it does. Ideally the Managing Director should be recognising the necessity for such an approach, but we suggest that the best way is for the Head of Sales and the Head of Operations to get together and start the process rolling.

Taking that first step is the most difficult one, and it takes more than one person to implement the change. It is advised that if you are in Sales or in Operations then consider making the first step and approach your counterpart and start the process – it is better than continuing with mistrust, conflict, stress and unhappy customers.

You will soon start to get the support to implement the culture change.

So ask not the question: ‘What can your company do for you?’ but ‘What can you do for your company?’ and the first part will fall into place. Think of others, improve for long-term and not short-term gain and you will meet customers’ expectations and enjoy your jobs with less stress and more time to concentrate on your actual job.

Further guidance
Pinnacle Consulting is a leading sales and marketing recruitment agency operating exclusively in the building products sector.

If you are an employer looking to recruit, please call us to discuss your requirements on 01480 405225 or us at email recruit@pinnacleconsulting.co.uk.


Tuesday, 12 December 2017

How to change the relationship between Operations and Sales

Many companies acknowledge that they need to improve the relationship between Sales and Operations, but doing this is easier said than done. 

So how do companies go about creating this change of approach?

The following guidelines should be at the centre of any approach a company adopts:

  • Understand the needs of the customer and focus your actions around them
  • Understand the current limitations of the Operations and Sales departments and find a way to solve them - permanently and perpetually
  • Create a climate of education and understanding of each other’s role within the company
  • Work together and communicate as one team, creating a happy working environment where people want to work for each other and take responsibility
  • Be consistent but flexible in your approach
  • Create a climate for growth and market-leading excellence, to give your company a competitive advantage
Implementing a new culture for sales and operations to thrive
The best way to bring about this kind of culture and structure change, is to strip back and question everything in your current processes to find out where the problems are, then establish a system that makes your customers happy, your Sales department happy, your Operations team happy, your Finance team happy and your competitors livid!

If we go back to that often-repeated accusation from Sales “Why can’t you supply what we are selling when we have promised it?” and dig a little deeper, you discover how few companies operate and communicate in unity.

Perhaps the Salesperson has a valid complaint to Operations and perhaps the Operations team has a valid reason to be frustrated at the demands from Sales. These problems are usually created due to lack of education, communication or effective planning.

In these instances, it is useful to look at on what basis the products have been promised. Are they realistic and in line with the agreed lead-times and guidelines that Sales have been advised they can promise customers without conferring with Operations? If they were, you should question the robustness and quality of your system and make changes accordingly. If they were not, as well as questioning why the customer has been told something that is not possible, you should also consider if what they are asking is feasible and necessary for the future and then ask: do we still need to question the robustness and quality of our system? That is a key point: always move forward and evaluate. However, it is equally important to address why the Salesperson has not acted as a team member by their actions.

It is clear that confused messages to customers and lack of consistency within companies can cause major problems, even resentment and division between people and departments and needs to be avoided.

What should Operations be doing?
An Operations Manager/Director needs to make sure they are in control of what is being made and what is going out, rather than letting his team take total control, as otherwise the easy order will be picked by the Warehouse, rather than the larger one, the one that needs more time to prepare, or the one that is awkward to pick. This way an Operations Manager/Director is in control of what is going on and is able to react more quickly to emergencies, as well as knowing exactly what is coming off the production lines and out of the warehouse. However, this will slowly change over time, as it becomes more of a team environment.

Although you always need to be in control and aware, once the process of communication and education starts to become enshrined throughout the company, all members of your team begin to take responsibility and become true team players. You are then able to rely on people to make decisions that are for the good of the company and the customer.

One of the keys to success in Operations is to have an effective Material Resources Planning System (MRP System) with its parameters established around a mixture of knowledge, facts and common sense.

A guide to success
Below is a simple guide for an effective planning system to improve the relationship. Although this is aimed at Operations, it is exactly the sort of areas and points that Sales Directors, Business Development Managers and National Accounts Managers should be aware of, and embrace and encourage in their new closer relationship with Operations

  • Know the role of Sales and the needs of the customer and be involved
    • Speak to your counterpart in Sales on a regular basis and ensure that relevant people from Operations are talking with Internal Sales
    • Make sure you are involved/aware of new product launch plans and promotional activity or new business that might affect demand of any product
    • Make sure that you communicate to the customer any changes to the original agreement. This should be done as early as possible and preferably via the Sales department (internal or external)
    • Ask yourself if you know what customers actually want in terms of service. If necessary meet your customers to enhance your understanding and process
    • Find out on what basis sales forecasts for production are being made and have an expert input at an early stage
    • Attend key sales meetings and gain a better understanding of the pressures and processes of the Sales team and vice versa
  • Look at your systems
    • Ask yourself if your company’s lead times are realistic and evaluate on what basis they have been made and by whom. This is especially important when you move to a new company or position
    • Look at your maximum/minimum stock and re-order levels and how often you check them for excessive demand and review the norm
    • Know what you can actually achieve per day and how you can achieve it
    • Know what you need to achieve on each individual trading day and how you are going to achieve it
    • Strive to always deliver on time and in full
    • Know (and evaluate) where and what the potential process hold-ups are in order to successfully achieve the company’s goals
    • Look at the robustness of the purchase order/supply trail and if delays and errors are created as a result
  • Know your team, plan ahead and adapt
    • Know and evaluate what everyone under your control does in their role and what their value is. This applies to your staff and suppliers
    • If your team are making errors that cause problems to the customer, have a plan to prevent them happening again, e.g. picking errors, goods arriving damaged, goods being sent to the wrong place, substandard product being manufactured
    • Evaluate if you have the right people, right machines and right processes in place and always consider if you need to recruit, make redundancies, change roles, or automate manufacturing/assembly, streamline operations, change packing materials and processes, evaluate transportation methods or improve IT
    • If possible have an alternative in place in the event of machine breakdown or a supplier letting you down
    • When required, consider if you need to employ more people or introduce overtime to meet demand
These points are geared towards meeting the customers’ requirements now and in the future and should to be addressed on an on-going basis; otherwise you will soon be back to square one.

Part 3: Become a better Sales person by working with Operations

Monday, 11 December 2017

The importance of the relationship between Operations and Sales in the building products sector

We have asked sales professionals from within the building products/materials industry to express their opinion on the biggest obstacles that prevent them from achieving success in their jobs. The results show one of their main frustrations is poor operational support.

We decided to look in more detail at the relationship between ‘Operations and Sales’ and provide useful insight to help those from both functions in their jobs.

To start with, lets look at this problem from the view-point of Operations and try to discover why there is division between the functions and how to establish a positive team relationship.

Understanding the function of Operations
The crux of the division is perfectly illustrated by these statements, firstly from Sales: “Why can’t you supply what we are selling?” and from Operations: “Why are you selling and promising what we can’t supply?”

Who is and who isn’t doing their job correctly? Like most things, it’s not quite that simple. So, what is the main function of Operations at a manufacturer of building products?

Operations is at the centre of a company and, although their jobs don’t exist without an order, it’s no good having an order if the products can’t be made and to the correct standard and quantity. It is also equally pointless having an order if it cannot be dispatched to the customer when they need it.

Additionally, there are many wider company issues that need to be considered by the person in charge of Operations: manpower and recruitment, logistics and budgets; for example, a company may not be financially viable if stock value is too high or if processes are too costly or unreliable. These challenges normally sit firmly in the domain of Operations - Sales can be blissfully unaware that they have other things to do than assist them!

However, this does work the other way round too, which demonstrates why ‘understanding’ is one of the first barriers that needs to be broken down if you want to create a true team relationship between Sales and Operations.

The role of Operations should be to ensure there is always the right stock of the right products at the right time, and within a system that provides flexibility for those inevitable emergencies.

There is, of course, the equally important requirement to ensure processes are efficient and accurate, to maximise margins and create a climate where growth is possible. This has to be achieved with the focus on the needs of the customer, which is often forgotten by Operations and, yes, Sales too!”

So far, this all sounds perfectly sensible: a Salesperson wants to sell a product and Operations want to make and dispatch the product. Both are seemingly doing their jobs and are working for the same company with the desire to make it a successful one by meeting customers’ requirements profitably. However, things go wrong. Why?

What causes the issues between the functions?
The problem in many companies is that the real needs of the customer are not at the centre of decision-making.

This is one of the main causes of the problem as self-interest, combined with a general lack of communication, understanding and process, results in everyone forgetting what is important: the customer.

Generally, a Salesperson only focuses on their quota. Once they make a sale, they move on. It is not their concern how orders are fulfilled. As soon as they have their order, any problems that may arise are an Operations problem. The key to resolving this line of thought is to drive home that a sale is not a sale until the customer is happy.

Operations tend to view Salespeople as an annoyance to their daily work. An Operations employee focuses on the many tasks involved in running a business. Although the obvious goal should be to drive sales, many don't look at it that way and will put a sale at the bottom of the pile...’I'll get to it when I get to it’.

So, rather than accuse, blame, defend and have an ensuing state of chaos, Operations and Sales need to focus on how the requirements of the customer can be met and how the company can operate efficiently and effectively, leaving the competition to fight over the unwanted scraps.

The need to view Sales and Operations as one function
Many companies are beginning to realise there is no dividing line between the two departments. Operations should be a function of Sales and Sales should be a function of Operations.

Unless both sides realise that the common goal is the customer, nothing will ever change. If the blame culture continues to be rife in your company, the customer will be the loser, which ultimately means everyone loses.

It is strongly recommend that the only way to move forward and stop having the same problems and issues is to create an environment where everyone is on the same side, acting with one voice and in one direction. So, rather than moan, find out the solution to the problems and issues and don’t let them happen again, wherever the blame lies.

Part 2: How to change the relationship between Operations and Sales

Sunday, 10 December 2017

Infrastructure drives growth in new orders but Construction Output falls says CPA

ONS figures published last show that construction output in October fell by 1.7% and was 0.2% lower compared with one year earlier but the better news is that new orders in Q3 rose 37.4% over the quarter and 25.5% on an annual basis.

Rebecca Larkin, Senior Economist at the Construction Products Association, commented: “The Data confirm that previous falls in new orders over the last twelve months are beginning to translate into lower construction activity in the commercial and public non-housing sectors. In addition, output in private housing RM&I, the third-largest sector, has now fallen for two consecutive months and taken in conjunction with the recent decline in new car registrations, suggests consumer willingness to spend on big-ticket purchases is being constrained by the fall in real wages.

“With regards to new orders in Q3, the strong headline growth rate was driven by infrastructure, reflecting the award of phase one contracts for HS2, a project worth £55.7 billion overall. As the ONS points out, new orders growth rates this high were only previously recorded when contracts for the Channel Tunnel were awarded in 1987. This aligns with the CPA’s forecast of infrastructure as the primary driver of output growth over the next two years.

 “Excluding infrastructure, new orders rose 4.1%, including a 35.4% increase in public housing, to the highest in three years as work accelerates under the Shared Ownership and Affordable Homes Programme. However, the data for new orders signals that the weakness in the commercial and public non-housing sectors is likely to continue.”

Image from Shutterstock: 

Tuesday, 5 December 2017

A Christmas present for the Building and Construction industry

Seasonal cheer as the UK construction output rises at its fastest pace for five months.

This was led by housing as November data pointed to a moderate rebound in UK construction output, with business activity rising at the strongest rate since June 2017. Business optimism as picked from October's five-year low too.
New orders and employment numbers also increased to the greatest extent in five months.

However, the improvement in construction growth was largely confined to residential work. The latest survey revealed sustained reductions in commercial building and civil engineering, with the latter now experiencing its longest period of decline since the first half of 2013.

Adjusted for seasonal influences, the IHS Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) picked up from 50.8 in October to 53.1 in November, to remain above the 50.0 no-change value for the second month running. The latest reading was the highest for five months and signalled a solid rate of business activity growth across the construction sector.

House building projects were again the primary growth engine for construction activity. Survey respondents suggested that resilient demand and a supportive policy backdrop had driven the robust and accelerated upturn in residential work.

Commercial construction was the weakest performing area of activity in November, which continued the trend seen for much of 2017 so far. Some firms noted that Brexit-related uncertainty and the subdued economic outlook had held back spending among clients.

Take a look at our latest construction sales jobs >>

Meanwhile, civil engineering activity fell for the third successive month, which represents the longest phase of decline seen for over four years. That said, the latest drop in work on civil engineering projects was only marginal. Some survey respondents commented on hopes that forthcoming tender opportunities on infrastructure programmes (particularly energy and transport) would help to support workloads.

Construction companies indicated a moderate rebound in new orders in November, with the rate of expansion the fastest for five months. Anecdotal evidence cited a general improvement in client demand after the soft patch this summer.

Higher levels of new work helped to support a moderate rise in staff numbers and input buying in November. Lead-times for construction products and materials lengthened sharply, linked to pressure on supplier capacity. However, cost inflation eased to its least marked for 14 months, with some firms reporting signs that exchange-rate driven price rises had started to lose intensity.

Business confidence regarding the year-ahead outlook for construction activity remained among the most subdued since mid-2013, which panel members mainly linked to heightened political and economic uncertainty. However, the degree of optimism picked up from October’s 58-month low, helped by a modest recovery in new invitations to tender during the latest survey period.

Tim Moore, Associate Director at IHS Markit and author of the IHS Markit/CIPS Construction PMI®: “UK construction companies experienced a solid yet uneven improvement in business conditions during November. Once again, resilient house building growth helped to offset lower volumes of commercial work and civil engineering activity.

“Survey respondents noted that residential projects underpinned the rebound in total new order growth to its strongest since June, helped by strong demand fundamentals and a supportive policy backdrop.

“Construction firms reported that heightened economic and political uncertainty continued to hold back commercial development activity. The latest drop in civil engineering was linked to a recent lack of tender opportunities for infrastructure-related projects.

“Business optimism across the construction sector remained relatively subdued, but picked up from the near five-year low seen in October. This represented the first improvement in confidence for three months, which construction firms attributed to increased sales enquiries and hopes that risk aversion among clients will recede over the course of next year.”

Duncan Brock, Group Director Customer at the Chartered Institute of Procurement & Supply, said:
“At last the construction sector, has picked its feet up with the biggest overall improvement in five months, underpinned by a moderate rise in new orders, but the strongest since June.

“It appears that policy support and a small recovery in the UK economy has boosted sentiment and encouraged clients to come out of their shells and start building again. The housing sector was the primary driver of growth increasing at the fastest rate for almost half a year.

“However it is private sector companies that need to commit to big ticket spending, with commercial development still under performing as persistent Brexit uncertainty continues to bite. Concerns over civil engineering in particular are also prevalent with its downward course the longest since 2013 and linked to a shortfall of new tender opportunities.

“Across construction supply chains, delivery times have been under pressure, as materials were in higher demand, while stocks remained in short supply. Lead-times from vendors have now deteriorated in every month for over 7 years.

“Overall, the sector showed an incremental improvement, but business optimism was on the rise and up from last month’s five-year low. Perhaps the darkest days are behind the sector with fresh impetus on the horizon for the New Year.”


Image from Shutterstock

Monday, 4 December 2017

Job in Focus: Operations Manager in London for Interior Finish Products - £50k

Our new Job in Focus is for a Operations Manager for Interior Products. You would be responsible for logistics, purchasing, suppliers, finance and quality. Also assisting VIP clients (architects, designers and end-users). In charge of a team of 10. The package is circa £50k.

Our Construction & Building Industry Job in Focus feature takes a detailed look at some of the fantastic sales & marketing construction and building materials job vacancies currently on our books. 

Job in Focus is also promoted on our website. www.pinnacleconsulting.co.uk 


JOB IN FOCUS FULL DETAIL





Job Title: Operations Manager
Job Ref: J9763
Product: Interior Finish
Location: London & South East
Salary: £50k

Manufacturer of High End Interior Products. Operational responsibility for a team of 10. 

Package: £40k - £50K, Oyster Card, Private Healthcare, Contributory Pension, Phone & Ipad. 

Employer: A revered manufacturer within the interiors market with excellent product quality as well as being renowned for their high quality service. 

Job Description: You will be responsible for head office operations including logistics, purchasing, supplier relations, finance and overseeing quality both in house and on site. You will also have responsibility for assisting with VIP clients including architects, designers and end users. 

Area: Role will be supporting London but based in North West London - ideal locations would be Harrow, Wembley, Edgeware etc. 

Person: We are seeking candidates with an operational background who have experience in high end interior products i.e. kitchens, bathrooms, bedrooms, flooring etc. 

For further information or to discuss your career options contact Luke Rootham on 01480 405225 or apply online.

Monday, 27 November 2017

CPA responds to the Autumn Budget 2017

The Construction Products Association (CPA) has produced an excellent response to last weeks' Budget and detailed all the relevant issues relating to the building and construction industry. Their response it reproduced, in full, below.

Against a backdrop of slowing economic growth, and continued uncertainty over the shape Brexit, the Chancellor delivered his first Autumn Budget promising a forward-looking economy on a new path with its European neighbours.



The Office for Budget Responsibility provided a downgrade on the projected growth rate for 2017, blaming it on weak productivity. The OBR cut growth forecasts from 2% to 1.5%, and for 2021 instead of the projected 2.0% the economy is expected to grow 1.5%.

The headlines were saved for housing with the Chancellor announcing that as of today, he is abolishing the stamp duty charge for first time homebuyers for properties up to £300,000, and on the first £300,000 of the purchase price of properties up to £500,000. The Chancellor also committed £44 billion of capital funding, loans and guarantees, including an additional £15.3 billion in new measures, to allow the delivery of 300,000 net additional homes per year by the mid-2020s, compared to 217,000 in 2016/17. To ensure a workforce is able to deliver these homes, an additional £34 million was promised to develop construction skills across the country.

On the construction sector in general, the government’s long-term ambition of increasing R&D investment will see £170 million for innovation to transform productivity in the construction sector. The government also reaffirmed the steps being taken to improve infrastructure delivery, and has promised to use its purchasing power to drive adoption of modern methods of construction, such as offsite manufacturing. Furthermore, the Infrastructure and Projects Authority will publish an update to the National Infrastructure and Construction Pipeline in December 2017, setting out a 10 year projection of public and private investment in infrastructure of around £600 billion.

Other content relevant to construction product manufacturers and distributors include:
  • The government is working with industry to finalise a Construction Sector Deal that will support innovation and skills in the sector, including £170 million of investment through the Industrial Strategy Challenge Fund.
  • The Budget commits a further £2.7 billion to the competitively-allocated Housing Infrastructure Fund (HIF) in England. This takes the total investment in the HIF to £5 billion.
  • A £1.7 billion Transforming Cities Fund to improve local transport connections and £385 million for projects to develop next generation 5G mobile and full-fibre broadband networks, both funded from the NPIF.
  • For business rates, the government will bring forward to 1 April 2018 the planned switch in indexation from RPI to the main measure of inflation (currently CPI).

Economic and Fiscal Overview

The Office for Budget Responsibility (OBR) has published its latest forecasts on the economic and fiscal outlook.

http://cdn.budgetresponsibility.org.uk/Nov2017EFOwebversion.pdf

The OBR has revised down its UK GDP growth forecasts for the next four years, reflecting a significant downward revision to its forecast for productivity growth and weaker business investment. The OBR now expects the UK economy to grow 1.5% in 2017 and 1.4% in 2018, a downward revision from 2.0% and 1.6% respectively, forecast in the March outlook. Furthermore, GDP growth for 2019 has been downgraded to 1.3% from 1.7% projected previously, as public spending cuts intensify and Brexit-related uncertainty continues to weigh on activity. In 2020, growth is expected to remain at 1.3%, before rising to 1.5% in 2021 and 1.6% in 2022, underpinned by a modest improvement in productivity growth.

Inflation expectations have been revised up for 2017 by 0.3 percentage points. Inflation is forecast at 2.7% for 2017, up from 2.4% anticipated in the March publication, reflecting the impact of the past Sterling’s depreciation on import prices and rising global commodity prices. However, as these effects begin to fade, the annual rate of inflation is expected to ease in the subsequent two years. In 2018 and 2019, inflation is forecast at 2.4% and 1.9%, compared to rates of 2.3% and 2.0% respectively, predicted in March. Looking ahead, the OBR projects CPI inflation to remain steady at the Bank of England’s 2.0% target each year between 2020 and 2022, unchanged from its previous forecasts.

Business investment is forecast to increase 2.5% in 2017, an upward revision from the 0.1% fall anticipated in March, due to ONS data revisions. In both 2018 and 2019, business investment is forecast to increase 2.3%, a downward revision from rate of 3.7% and 4.2% predicted in the previous OBR outlook. Overall, business investment is expected to remain subdued in the near-term, as ongoing Brexit-related uncertainty continues to dent activity. Business investment is projected to increase 2.4% each year between 2020 and 2022.

Public sector net borrowing is estimated to have totalled £49.9 billion during the 2017/18 financial year, a downward revision from £58.3 billion expected in the March Budget. Thereafter, public sector net borrowing is forecast to fall each year between 2018/19 and 2022/23, but will fall by £23.8 billion less between 2017/18 and 2021/22 than in the March forecast due to lower productivity growth reducing tax receipts. Total public sector net debt as a percentage of GDP is expected at 86.5% in 2017/18, down from 88.8% in the March Budget, reflecting the reclassification of English housing associations to the private sector. Thereafter, public sector net debt as a percentage of GDP is projected to decline each year, reaching 79.3% in 2021/22.

Industry and sector policies

The government made a series of new announcements relevant to businesses and industry. These include:

Skills and R&D
  • The government is working with industry to finalise a Construction Sector Deal that will support innovation and skills in the sector, including £170 million of investment through the Industrial Strategy Challenge Fund.
  • The government is taking a series of steps to improve the cost effectiveness, productivity and timeliness of infrastructure delivery. The government will use its purchasing power to drive adoption of modern methods of construction, such as offsite manufacturing. Building on progress made to date, the Department for Transport, the Department of Health, the Department for Education, the Ministry of Justice, and the Ministry of Defence will adopt a presumption in favour of offsite construction by 2019 across suitable capital programmes, where it represents best value for money.
  • The government will establish a partnership between employers, the Trades Union Congress and the Confederation of British Industry, to develop the National Retraining Scheme. Together they will help set the strategic priorities for the scheme and oversee its implementation, working with new Skills Advisory Panels to ensure that local economies’ needs are reflected.
  • As a first step, the National Retraining Partnership will oversee targeted short-term action in sectors with skills shortages, initially focussing on construction and digital skills. The government will support the construction industry to help ensure that there is a workforce fit to build 300,000 homes, providing £34 million to scale up innovative training models across the country, including a programme in the West Midlands. Construction skills will also be a focus for the National Retraining Scheme.
  • The government announced T levels at Spring Budget 2017. As implementation gets underway, the government will invest up to £20 million to help teachers and further education colleges prepare for this change.
  • The government will continue to work with employers on how the apprenticeship levy can be spent so that the levy works effectively and flexibly for industry, and supports productivity across the country.
  • The Budget invests a further £2.3 billion in R&D in 2021/22 from the NPIF, and increases the R&D expenditure credit to 12%, towards the government’s ambition to raise the level of investment in R&D in the economy to 2.4% of GDP.

Housing

  • The government is making available £15.3 billion of new financial support for housing over the next five years, bringing total support for housing to at least £44 billion over parliament.
  • The government will permanently raise the price at which a property becomes liable for stamp duty land tax (SDLT) to £300,000 for first‑time buyers to help young people buy their first home. The relief will not apply for purchases of properties worth over £500,000. 95% of first‑time buyers that pay SDLT will benefit, up to a maximum of £5,000, and 80% of first‑time buyers will pay no SDLT at all.
  • The government is keen to encourage owners of empty homes to bring their properties back into use. To help achieve this, local authorities will be able to increase the council tax premium from 50% to 100%.
  • The government will consult on a new policy whereby local authorities will be expected to permission land outside their plan on the condition that a high proportion of the homes are offered for discounted sale for first‑time buyers, or for affordable rent. This will exclude land in the Green Belt.
  • The government will provide £1.1 billion for a new Land Assembly Fund, funded from the NPIF. The new fund will enable Homes England to work alongside private developers to develop strategic sites, including new settlements and urban regeneration schemes.
  • The government will bring together public and private capital to build five new garden towns, using appropriate delivery vehicles such as development corporations, including in areas of high demand such as the South East.
  • The Budget commits a further £2.7 billion to the competitively-allocated Housing Infrastructure Fund (HIF) in England. This takes the total investment in the HIF to £5 billion.
  • The government will provide a further £630 million through the NPIF to accelerate the building of homes on small, stalled sites, by funding on‑site infrastructure and land remediation.
  • The Budget announces a further £1.5 billion for the Home Building Fund, providing loans specifically targeted at supporting SMEs who cannot access the finance they need to build.
  • The government will explore options with industry to create £8 billion worth of new guarantees to support housebuilding, including SMEs and purpose built rented housing (Build to Rent).


National and Regional Infrastructure
  • The Infrastructure and Projects Authority will publish an update to the National Infrastructure and Construction Pipeline in December 2017. This will set out a 10-year projection of public and private investment in infrastructure of around £600 billion.
  • £300 million will be spent on ensuring High Speed 2 (HS2) infrastructure can accommodate future Northern Powerhouse and Midlands rail services. Transport for the North and Midlands Connect are working up the case for these services. This will enable faster services between Liverpool and Manchester, Sheffield, Leeds and York, as well as to Leicester and other places in the East Midlands and London.
  • Budget announces a £1.7 billion Transforming Cities Fund to improve local transport connections and commits £385 million to projects to develop next generation 5G mobile and full-fibre broadband networks, both funded from the NPIF. It will target projects which drive productivity by improving connectivity, reducing congestion and utilising new mobility services and technology. Half will be allocated via competition for transport projects in cities and the other half will be allocated on a per capita basis to the 6 combined authorities with elected metro mayors – £74 million for Cambridgeshire and Peterborough, £243 million for Greater Manchester, £134 million for Liverpool City Region, £80 million for West of England, £250 million for West Midlands and £59 million for Tees Valley – enabling them to invest in their transport priorities.
  • The government is launching a new £190 million Challenge Fund that local areas around the country will bid for to encourage faster rollout of full-fibre networks by industry. Children in 100 schools around the country will be some of the first to benefit, starting with a pilot in the East Midlands in early 2018.
  • The Budget also commits to specific improvements for the Tyne & Wear Metro, and rail and road connections in the Cambridge – Milton Keynes – Oxford corridor.
  • The Budget announces the next steps for the North of Tyne devolution deal, paving the way for the area to elect a Mayor in 2019. This will see £600 million of investment in the region over 30 years and create a new mayor elected in 2019 with powers over planning and skills.
  • The government will invest £337 million from the NPIF to replace the Tyne & Wear Metro’s nearly 40-year-old rolling stock with modern energy-efficient trains.
  • The government has agreed a second devolution deal in principle with the West Midlands Mayor and Combined Authority to address local productivity barriers. This includes £6 million for a housing delivery taskforce, £5 million for a construction skills training scheme and a £250 million allocation from the Transforming Cities fund to be spent on local intra-city transport priorities.
  • The government has agreed a housing deal with Oxfordshire for 100,000 homes by 2031, and is working with Central and Eastern sections on commitments in 2018. The government will also consider significant new settlements and the potential role of development corporations to deliver these using private finance.
  • The government will also make available £300,000 to co-fund a study of opportunities for new stations, services and routes across the Oxfordshire rail corridor.
  • The government expects authorities and delivery bodies in the Cambridge – Milton Keynes – Oxford corridor to use existing mechanisms of land value capture and the new powers (subject to consultation) announced at the Budget to capture rising land values from the additional public investment. The government will also encourage authorities to explore the introduction of a Strategic Infrastructure Tariff, in addition to the Community Infrastructure Levy (CIL), supported by appropriate governance arrangements. These approaches will require developers to baseline their contributions towards infrastructure into the values they pay for land.
  • Greater Manchester and the government will work in partnership to develop a local Industrial Strategy. The government will provide a £243 million allocation from the Transforming Cities Fund and will continue to work with Transport for Greater Manchester to explore options for the future beyond the Fund, including land value capture.
  • The government will pilot a manufacturing zone in the East Midlands. This will reduce planning restrictions to allow land to be used more productively, providing certainty for business investment, and boosting local productivity and growth.
  • The government will invest in infrastructure upgrades that will provide direct services from Pembroke Dock to London via Carmarthen on new, state of the art Intercity Express trains. Additionally, the Department for Transport continues to develop proposals for a number of potential rail schemes within Wales. This includes station improvements at Cardiff Central Station and Swansea, improving Cardiff to Severn Tunnel Junction Relief Lines, and improving journey times between: Swansea and Cardiff; South Wales, Bristol and London; and on the North Wales Main Line. The government will also consider proposals to improve journey times on the Wrexham – Bidston line and provide necessary funding to develop the business case.
  • The government is investing an additional £45 million in the Pothole Fund in 2017/18 to tackle around 900,000 potholes across England.
  • The government announces £84 million for digital rail technology, including fitting state-of-the-art in-cab digital signalling across a range of trains. The government is allocating a further £5 million from the NPIF for development funding for a digital railway upgrade on the South East and East London Lines. The government will also fund a digital signalling scheme at Moorgate that will enable more frequent and reliable services.
  • The government is announcing a new National Infrastructure Commission study on the future of freight infrastructure, to be published in Spring 2019. The study will look at urban congestion, decarbonisation and how to harness the potential of new technologies. This includes platooning, where trucks travel in convoy using smart technology to communicate.
  • An additional £76 million will be spent on flood and coastal defence schemes over the next three years. This funding will better protect 7,500 households and boost food defence investment to over £2.6 billion between 2015/16 and 2020/21. Of this, £40 million will be focussed on deprived communities at high food risk, boosting local regeneration.
  • The Budget will provide £5 million to help enable the South Tees Development Corporation to take ownership of the SSI Redcar Steelworks site, and the government will work with local partners to prepare the site for redevelopment.
  • Following a consultation earlier this year, the government confirms that it will lend local authorities in England up to £1 billion at a new discounted interest rate of gilts + 60 basis points accessible for three years to support infrastructure projects that are high value for money. Details of the bidding process will be published in December 2017, and corresponding shares will be made available to local authorities in Scotland and Wales.

Capital Funding
  • £3.5 billion of new capital funding for the NHS in England: £2.6 billion will be for local groups of NHS organisations (Sustainability and Transformation Partnerships) to deliver transformation schemes that improve their ability to meet demand for local services; £700 million to support turnaround plans in the individual trusts facing the biggest performance challenges, and tackle the most urgent and critical maintenance issues that trusts are facing; and £200 million will support efficiency programmes that will, for example, help reduce NHS spending on energy, and fund technology. This will also be accompanied by private finance investment in the health estate where this provides good value for money.

Taxes and levies
  • As previously announced, to ensure that there is enough time to work with Parliament and stakeholders on the detail of reforms that will simplify the National Insurance Contributions (NICs) system, the government has announced that it will delay implementing a series of NICs policies by one year. These include the abolition of Class 2 NICs and reforms to the NICs treatment of termination payments. Also previously announced, the planned increase to the main rate of Class 4 NICs has also been cancelled.
  • For business rates, the government will bring forward to 1 April 2018 the planned switch in indexation from RPI to the main measure of inflation (currently CPI).
  • Legislating retrospectively to address the so-called “staircase tax” in business rates. Affected businesses will be able to ask the Valuation Office Agency (VOA) to recalculate valuations so that bills are based on previous practice backdated to April 2010 – including those who lost Small Business Rate Relief as a result of the Court judgement. The government will publish draft legislation shortly.
  • The frequency with which the VOA revalues non-domestic properties will be moved to revaluations every three years following the next revaluation, currently due in 2022. To enable this, ratepayers will be required to provide regular information to the VOA on who is responsible for business rates and property characteristics including use and rent. The government will consult on the implementation of these changes in the Spring.
  • Fuel duty will be frozen for an eighth year in 2018/19. The government will review whether the existing fuel duty rates for alternatives to petrol and diesel are appropriate, ahead of decisions at Budget 2018. In the meantime, the government will end the fuel duty escalator for Liquefied Petroleum Gas (LPG). The LPG rate will be frozen in 2018/19, alongside the main rate of fuel duty.
  • The Heavy Goods Vehicle (HGV) VED and Road User Levy rates will be frozen from 1 April 2018. A call for evidence on updating the existing HGV Road User Levy will be launched this autumn. The government will work with industry to update the Levy so that it rewards hauliers that plan their routes efficiently, to encourage the efficient use of roads and improve air quality.
  • The government is confident that the Total Carbon Price, currently created by the combination of the EU Emissions Trading System and the Carbon Price Support, is set at the right level, and will continue to target a similar total carbon price until unabated coal is no longer used. This will deliver a stable carbon price while limiting cost on business.
  • Budget 2016 announced the rebalancing of gas and electricity main rates; the government will set CCL main rates for the years 2020-21 and 2021-22 at Budget 2018. In addition, and to ensure better consistency between portable fuels for commercial premises not connected to the gas grid, the government will freeze the CCL main rate for LPG at the 2019-20 level until April 2022. To ensure that the CCL exemptions for businesses that operate mineralogical and metallurgical processes remain operable after EU exit, the government will clarify the definition of the exemptions in Finance Bill 2018/19.
  • The list of designated energy-saving technologies qualifying for an ECA, which support investment in energy-saving plant or machinery that might otherwise be too expensive, will be updated through Finance Bill 2017/18.
  • The government will freeze Aggregates Levy rates for 2018/19 at £2 per tonne but will return to index-linking the Levy in the longer term. Following consultation, the government has decided against introducing an exemption from the Aggregates Levy for aggregates extracted when laying underground utility pipes.
  • In response to the Office of Tax Simplification’s report ‘Value Added Tax: Routes to Simplifcation’, the government will consult on the design of the threshold, and in the meantime will maintain it at the current level of £85,000 for two years from April 2018.
  • Following a consultation into options for tackling fraud in construction labour supply chains, the government will introduce a VAT domestic reverse charge to prevent VAT losses. This will shift responsibility for paying VAT along the supply chain to remove the opportunity for it to be stolen. Changes will have effect on and after 1 October 2019. The long lead-time reflects responses to the consultation and the government’s commitment to give businesses adequate time to prepare for the change.

Monday, 20 November 2017

UK commercial and industrial doors market regains pre-recession level

The commercial and industrial doors market increased by an estimated 3% in 2016, following 4% growth in 2015, though there are indications that the growth rate is slowing in 2017.

Key factors underpinning growth in the market have included the increase in private commercial and industrial new build and non-residential RMI since 2012. While the market for industrial doors regained their pre-recession level in 2016, commercial and personnel access doors remain nearly 7% below its 2008 peak.


Sub-sectors within manufacturing such as transport, aviation and food production, have helped sustain construction demand for a variety of door products - from high insulated systems for refrigerated units, to large transport warehouse industrial doors. The chemicals and pharmaceuticals sectors also require very high-quality door systems and materials including high value specialised hygienic products developed for use in these industries. Changes to building regulations and increased requirements in terms of security, as well as sustainability issues, have also helped to assist market growth with increasing emphasis placed on higher-quality products.

The market for personnel doors is directly related to commercial and industrial new build and RMI demand, which declined between 2008 and 2012, but has seen continuous annual growth since 2013. In overall terms, the industrial doors market has demonstrated erratic trends at times with demand sometimes bucking an otherwise falling economic trend with rising demand. More importantly, an underlying steady level of servicing and maintenance expenditure has also contributed towards smoothing out demand.

Jane Tarver of AMA Research commented: “The market outlook for commercial and industrial doors over the next few years is positive, but forecasts indicate only modest growth in the short-medium term, based on a slowing trend of new construction orders and the uncertainty affecting business confidence and investment levels as a result of the Brexit process.”

Short-medium term prospects in construction activity in 2017/18 have gone from modestly optimistic to ‘relatively cautious’, with variations between construction sectors. Modest growth is currently forecast in the leisure and industrial sectors but with the commercial offices and retail sectors forecast to show short-term decline as they come under pressure reflecting reduced confidence and investment levels. 

Given the above background, the forecasts are that the commercial and industrial doors and shutters sector will show low to modest annual growth from 2016-21, with only 6% overall value growth currently forecast 2016-2021.

Demand will continue to focus on automated systems, more energy saving and security door systems, and for sustained RMI work across sectors leading to some market growth in the replacement market, while new build volumes for both personnel access doors and industrial doors will see lower rates of growth. Product innovations and increased security and insulation properties for both personnel access and industrial doors are also likely to be key factors underpinning market value into the medium-term.

The report (Commercial and Industrial Doors and Shutters Market Report – UK 2017-2021 Analysis)  is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Photo: Via Shuttestock

Thursday, 16 November 2017

Job in Focus: National Sales Manager for Lift Management services - £100k OTE

Our new Job in Focus is for a National Sales Manager selling a service into Main contractors, ideally based in the South East of England. The opportunity is working for a rapidly growing  provider of lift management solutions targeting contractors on major commercial projects. On offer is a very competitive salary with fantastic commission scheme that will see the successful candidate earn a OTE of £100k.

Our Construction & Building Industry Job in Focus feature takes a detailed look at some of the fantastic sales & marketing construction and building materials job vacancies currently on our books. 

Job in Focus is also promoted on our website. www.pinnacleconsulting.co.uk 


JOB IN FOCUS FULL DETAILS






Job Title: National Sales Manager
Job Ref: J9714
Product: Services
Location: London & South East
Salary: £100k

LEADING SPECIALIST WITHIN THE LIFT MANAGEMENT MARKET 

PACKAGE: Up to £65,000 with monthly bonus OTE £100k, company car, fuel card, pension, healthcare, mobile phone, laptop and holidays. 

EMPLOYER: Well respected contractor within the crane and lift management market, specialising in quality service and meeting the customers expectations. They are a rapidly growing business with loads of opportunity for both personal and career development. 

JOB DESCRIPTION: National Sales Manager - focusing on developing sales within the crane hire market place. The successful candidate will be selling the business on its USPs and services trying to create demand working on major commercial projects. Your main focus will be on targeting main contractors. There are already strong relationships with a number of loyal accounts but there will also be a strong element of creating new business within the area. Moving forward this role will move into a management position with the needs to look after a sales team and recruitment for further positions. 

AREA: National - ideally living in the South East - Hertfordshire, Bedfordshire, Northamptonshire, Lincolnshire, Norfolk, Suffolk, Cambridgeshire, Essex, London, Kent, Surrey, Sussex, Middlesex, Buckinghamshire, Berkshire, Oxfordshire, Hampshire, 

PERSON: The successful candidate will have experience within the construction market place, ideally with crane hire or heavyside product knowledge but the client is open as long as the candidate has strong contacts with contractor sector. The successful candidate with be ambitious and very driven personality who wants to prove themselves within a growing business. A lot of opportunity for growth and the successful candidate will be heavily rewarded for there efforts. 


For further information or to discuss your career options contact Stuart Entwistle on 01480 405225 or apply online.

Wednesday, 15 November 2017

More good news from the Housebuilding sector

The housebuilding continues to bring the building industry positive news, after Wimpey reported a strong second half to 2017 last week, McCarthy & Stone, Bovis, Crest Nicholson and Barratt Developments all issued positive statements to the City. A strong housebuilding sector is good for all involved, manufacturers, distributors, merchants, developers, architects, contractors and builders

McCarthy & Stone announced its financial results for the full year ending August 31 2017, which show record revenues for the firm up 4% to £661 million although total legal completions at 2,302 were similar to last year (2,296). Underlying profit before tax was £94.1 million (FY16: £105.0 million). The firm said that the results were in line with market expectations.

The results reveal a “strong” forward order book at November 10 2017 of £277 million (November 11 2016: £250 million) with workflow on track to support the firm’s growth strategy and deliver around 80 new sales releases in 2018, up on the 52 in 2017.

McCarthy & Stone CEO Clive Fenton said: “We achieved a strong result in the second half of the year and delivered an improvement in both margins and volumes compared to the first half of FY17. Our full year completion volumes were in line with the prior year despite some headwinds as a result of the increased level of uncertainty in the secondary market and the expected lower number of first occupations.  We delivered to market 49 high-quality new developments and maintained our exceptional build quality and levels of customer satisfaction. 

“The group starts the new financial year with a strong forward order book and a robust balance sheet.  We have sufficient land under control, much of which already has detailed planning consent, to deliver our strategic growth plan of building and selling more than 3,000 units per annum.”

McCarthy & Stone has been exploring additional revenue streams to diversify its business model including a strategic relationship with Places for People (PfP Capital) to supply homes for rent – the firms says 17% of older people have indicated that they would rather rent than buy, equivalent to around 2 million people.

The firm has also been piloting a new scheme to build bungalows as an alternative product for retirees.

Bovis, meanwhile, in a trading update says it is making encouraging progress towards its medium term targets “with continued improvement in customer satisfaction and excellent progress in optimising the balance sheet and bringing additional cash into the business,” according to group ceo Greg Fitzgerald. “We expect to have a net cash position of at least £100 million as at 31 December 2017.  Trading is in line with expectations, the market remains strong, and we are on track to deliver another disciplined period end."

Bovis is fully sold for its targeted FY 2017 completions with an average sales rate over the period of 0.52 (H1 2017: 0.48), and the firm says pricing remains “robust” and it expects to deliver an increase in the average selling price for FY 2017, largely driven by changes in mix with a modest increase in underlying prices.

Bovis says its HBF Customer Satisfaction rating on completions since February 1 2017 has averaged 75%, equivalent to a 3-star rating and the firm remains confident in achieving its medium term target of a 4-star rating.

Crest Nicholson has continued to grow overall housing volumes this year, issuing an update on its financial year ending October 31 2017, Crest’s overall housing unit completions in 2017 rose 2.3% to 2,935 homes against 2016.

Its open market average selling prices improved 5.4% to £391,000, which Crest said tallied with its “well established strategy to position the business at around this pricing level”.

Underlying sales rates for 2017, excluding PRS, averaged 0.77 sales per outlet per week against 2016’s 0.81, reflecting the increase in Crest’s average selling price and to a degree, Crest said, the softer central London market. Its average number of sales outlets increased 8.5% to 51.

As of the end of October, Crest’s total forward sales were 13.6% ahead of 2016 at £391.4 million.

Crest said the housing market was “generally robust” across the group’s operating areas, but transactions in central London were “suffering from some volume and price weakness”.

It added that “whilst there may be some impact” from ongoing economic and political uncertainty, the fundamentals of the new build housing market remained strong.

The housebuilder expects growth in revenues across all tenures and reported sales for the year to be around 6-7% higher than 2016.

Stephen Stone, Crest’s CEO, said: “I am pleased to report yet another year of growth for the group.  The business continues to increase the number of homes built and carries positive momentum into 2018 with strong forward sales.”

Barratt, covering the period from July 1 to November 12 2017, said the robust demand across its regions was reflected in its net private reservations per average week of 268, against the 265 of the equivalent period in 2016.

The volume housebuilder launched 79 new developments during the period (2016: 69), operating from an average of 373 active outlets compared to 2016’s 370.

Total forward sales as of November 12 2017 grew 8.4% to a value of £2,876.0 million, equating to 12,843 plots (November 13 2016: 11,733 plots).

David Thomas, Barratt’s CEO, said: “We have started the financial year strongly with a good sales rate, driven by customer demand for new homes, and supported by an attractive lending environment. We remain committed to quality, build excellence and market leading customer service and are working hard to increase the supply of houses across the UK.” 


Photo via Shutterstock

Tuesday, 14 November 2017

Taylor Wimpey reports “strong” second half

There is still lots of good news to be found in the building and construction industry, despite concerns about the future, this has been shown by the promising news announced this week that Taylor Wimpey performed “strongly” during the second half of 2017

The volume housebuilder said that sales rates for the second half of the year to date were 0.71 sales per outlet per week against the 0.70 achieved in the equivalent period last year. Over the past eight weeks, the sales rate has been 0.73, in line with the same point in 2016.

At the same time, its current total order book is slightly down on last year, at 8,751 homes (2016: 8,981), standing at around £2.2 billion against 2016’s £2.3 billion.

Taylor Wimpey also said it expected a “modest cash impact” in 2017 from addressing leasehold issues, with the majority of the outflow to be spread over approximately the next two years. It made a provision in its first half accounts, before tax, of £130 million for dealing with leasehold matters. Today it said it had reached agreements with freeholders allowing the “substantial majority” of its customers with a ten-year doubling lease to convert ground rent terms to a structure based on the retail price index (RPI).

The business added that it was set to deliver FY 2017 results according to expectations, with further growth and performance improvement anticipated in 2018. At the same time, it remained “alert to the potential risks from heightened political and economic uncertainty”.

Pete Redfern, Taylor Wimpey’s ceo, said: “Taylor Wimpey has performed strongly during the second half of 2017, delivering excellent sales rates and making further good progress against our operational targets. While we are alert to potential political and economic risks, demand for new housing remains high across the UK and market conditions are favourable.

“Notwithstanding the recent small increase in the base rate, we have continued to see stability in trading patterns.”

Monday, 13 November 2017

Construction Output Falls for a Second Quarter

ONS figures published last week show that construction output contracted 0.9% in the third quarter of 2017. This is a downward revision from the preliminary estimate of a 0.7% decline released in October and follows the 0.5% fall in output recorded in Q2.
Rebecca Larkin, Senior Economist at the Construction Products Association, commented: “At a headline level, today’s data shouts ‘construction recession’, marked by two consecutive quarters of falling output. However, output remains at relatively high levels – 1.1% higher than a year ago and 7.1% higher than 2015 Q3.

“There is also a clear variation in performance by sector, as highlighted in the CPA’s forecasts. Private housing output rose 1.8% to a record high during the quarter, with demand and confidence sustained by the Help to Buy equity loan. The £10 billion extra funding for the policy announced last month will maintain impetus in house building, with greater certainty over affordable rent-setting also supporting building by housing associations.

“Nevertheless, areas of weakness include private commercial, where new orders have fallen for three quarters and signal a lack of offices and retail projects to replace those now coming to an end. This is echoed in the public non-housing sector, which is suffering from lower volumes of work on schools and a dearth of new large hospitals projects.”

Friday, 10 November 2017

Construction Growth in Q3 but Weak Orders Weigh on the Outlook

The Construction Products Association’s Construction Trade Survey for Q3 shows that despite rising costs and diverging performance across sectors, the industry extended its run of growth to eighteen quarters.

The survey of main contractors, SME builders, civil engineering firms, product manufacturers and specialist contractors found that the construction supply chain reported increases in sales, output and workloads in the quarter, driven by increased demand in private housing, repair and maintenance and infrastructure. Net balances for enquiries and expected product sales for the year ahead remained muted, however, and contractors' order books were sustained by work in only three sectors: private housing, housing R&M and non-housing R&M. New orders were reported lower in sectors such as commercial, industrial and public non-housing, which account for one-third of construction output.

The effects of the Sterling's depreciation in the second half of 2016, following the EU Referendum, are still pervasive, with 92% of main contractors, 85% of heavy side manufacturers and all light side manufacturers reporting a rise in raw materials costs in Q3. In spite of this, only a small proportion of contractors are increasing tender prices and, as a result, 31% of main contractors reported a fall in margins, the worst balance in five years.

Latest Construction Products Sales Job>>

Commenting on the survey, Rebecca Larkin, Senior Economist at the CPA, said: "This 18th consecutive quarter of growth reported by the industry stands in contrast to the construction recession in preliminary GDP data from the ONS. There is a clear division in fortunes across sectors, however, with weakness in the commercial and industrial sectors offset by strength in new build private housing, a sector where demand and confidence remain supported by the Help to Buy equity loan.     

"In common with the wider economy, the construction industry continues to experience cost inflation, particularly for raw materials. A clear consequence of the supply chain trying to absorb these higher costs is the fall in contractors' profit margins since the start of the year. Combined with a smaller pipeline of upcoming work in some key sectors, the survey’s more mixed view on near-term industry prospects is not surprising."

Suzannah Nichol, Chief Executive of Build UK said: "The latest Construction Trade Survey result highlights the industry's continued growth, contrary to ONS’s statistics, with both contractors and specialist contractors reporting a rise in output during Q3. However, a lack of required skills remains a concern, with labour availability issues continuing to impact on contractors' business performance. Build UK believes industry needs to recruit, train and retain a skilled workforce and we are working with members, government and other key stakeholders to ensure that this remains a key priority."

CECA Director of External Affairs, Marie-Claude Hemming, said: "It is good news that our members see growth in infrastructure, to the benefit of businesses and communities across the country. However, uncertainty continues to act as a drag on the ability of the construction industry more generally to boost the economy. Ahead of the Autumn Budget, we are calling on the UK Government to commit to the projects outlined in the National Infrastructure Delivery Plan, to secure the foundations of a strong economy, drive productivity, and deliver post-Brexit growth."

Key survey findings include:

  • 40% of main building contractors, on balance, reported that construction output rose in the third quarter of 2017 compared with a year ago
  • 20% of specialist contractors reported a rise in output during Q3
  • 24% of civil engineers, on balance, reported an increase in workloads during Q3
  • On balance, 21% of SME contractors reported increased workloads in Q3 compared to three months earlier
  • Main contractors reported higher orders in private housing and both housing and non-housing R&M
  • 13% of civil engineering firms reported an increase in new orders in Q3, on balance
  • 26% of SMEs but no specialist contractors reported an increase in enquiries in Q3, on balance
  • Overall costs increased for 82% of civil engineering contractors, whilst 92% of main contractors, 85% of heavy side manufacturers and all light side manufacturers reported raw materials costs rose in Q3.