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.

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.


  • 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 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. 


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


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.

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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.

Thursday, 9 November 2017

We've been together for 40 years! NMBS MD celebrates career milestone

NMBS managing director, Chris Hayward is celebrating a major career milestone. 

October 2017 marked 40 years since he first started working for the UK's largest buying society for independent builders', plumbing and heating, timber and hardware merchants.
Chris first became part of the NMBS team on the 17th October 1977. He joined the business as an office junior - a position which at the time was the equivalent of a modern day apprentice. It's perhaps fitting given the nature of NMBS that this first role was within the finance department.
Over the next four decades, Chris enjoyed continued progression and the opportunity to gain exposure to all aspects of NMBS' core service offering. After starting as an office junior, he worked within various roles in the finance department whilst studying business studies and for an accounts qualification in the evenings.
He was promoted to Sales Ledger Supervisor in 1980 and then to the role of computer manager in 1982 where he enjoyed the added responsibility of preparing the company accounts.
He held this latter post for nine years and during that time played a key part in helping NMBS to embrace the digitial revolution and in managing the buying society's shift to EDI and more computerised methods of operation.
He was promoted to the position of commercial manager in 1992 at the age of 31 before becoming marketing communications manager at 34 and then marketing director in 1999, aged 38.
Two years later, he was promoted to the position of managing director at the age of 40. Reflecting NMBS' ability to recruit and retain good people, he is only the third MD in the company's 54-year history. He follows in the footstep's of John Tatton, who actually appointed Chris in 1977, and the buying society's second MD, Paul Hayman.
Chris' 40 years of service to NMBS was recognised with a special commemorative presentation at the NMBS Dinner Dance.
Commenting on his anniversary, Chris said "I joined NMBS as an apprentice and four decades later I still see the apprenticeship continuing. There is always something new to learn, new challenges to face and new opportunities to act upon which can help NMBS with its on-going efforts to strengthen independents."
He adds: "I've seen many changes over the years with many of the most significant developments stemming from advances in IT and the advent of the internet. I've also enjoyed many highlights and made many good friends amongst both our members and our suppliers.
"I'm looking forward to building on my achievements and experience to date and building a company legacy which supports dynamic and continual change with a real commitment to lifelong personal development."

Monday, 6 November 2017

Cost Increases Reported by 90% of Construction Product Manufacturers

UK construction product manufacturers are expecting slower growth in sales and activity as cost rises and slowing construction output continue to weaken market conditions, according to the CPA's State of Trade Survey for 2017 Q3.

Results of the survey showed that 10% of heavy side manufacturers reported an increase in sales in Q3, compared to 40% reporting a rise in Q2. On the light side, 36% of product manufacturers reported higher sales, decreasing from a balance of 55% in the previous quarter.

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The weaker performance in Q3, along with rising costs for raw materials, fuel and energy, echoes the slower construction activity already seen across industry data and recent surveys. It has also lowered manufacturers’ expectations for product sales in Q4. On balance, no firms on the light side anticipate an increase in sales during the October to December period, whilst 21% of heavy side firms expect sales to decline.

The construction products manufacturing industry has an annual turnover of £55 billion, directly providing jobs for 300,000 people across 22,000 companies. Products range from ‘heavy side’ materials such as steel, bricks, timber and concrete to ‘light side’ products such as insulation, boilers, glass and lighting. For the year ahead, 28% of heavy side firms anticipate an increase in product sales, whilst on the light side, 33% of firms expect sales to increase.

Rebecca Larkin, CPA Senior Economist said: “For construction product manufacturers, the near-term outlook is being clouded by the perfect storm of a broad-based rise in input costs, slower economic growth and signs of an emerging weakness in construction activity outside of private housing.

"Overall costs increased for 90% of all manufacturers in Q3. Although the survey showed inflationary pressures are anticipated to ease slightly over the coming year, the industry has turned noticeably more pessimistic about the strength of activity in coming quarters. New orders in construction fell to the lowest level in three years in Q2 and the survey suggests this will start to filter through to reduced activity on site by the end of the year."

Key survey findings include:

  • A balance of 10% of heavy side firms and 36% of light side firms reported that construction product sales rose in the third quarter of 2017 compared with the second quarter
  • On an annual basis, sales rose for 30% of heavy side firms and 45% of firms on the light side, on balance
  • On balance, 21% of heavy side manufacturers anticipated a fall in sales in Q4, decreasing from a balance of +7% in the previous quarter
  • On the light side, no firms expected an increase in product sales in the next quarter, compared to a balance of 20% in Q1
  • Annual cost increases were reported by 90% of manufacturers on the heavy side and the light side
  • Raw materials costs rose according to 85% of heavy side manufacturers and 100% of those on the light side
  • 78% of heavy side manufacturers and 67% of light side manufacturers anticipate a rise in costs over the next year.

Friday, 3 November 2017

Construction activity rises slightly in October

UK construction companies signalled that business conditions remained subdued during October.

Output growth was largely confined to house building, which partly offset lower volumes of civil engineering and commercial activity. Moreover, the balance of construction firms expecting an increase in business activity over the next 12 months eased to its weakest since December 2012. Caution in terms of the outlook for construction workloads meant that employment numbers increased at one of the slowest rates seen over the past four years.

At 50.8 in October, up from 48.1 in September, the seasonally adjusted IHS Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI® ) moved back above the 50.0 no-change mark. However, the latest reading was weaker than the post-crisis trend (54.7) and signalled only a marginal rise in overall construction output.

Commercial building decreased for the fourth month running in October, which survey respondents liked to worries about the UK economic outlook and subsequent delays to decision-making among clients. Civil engineering was the worst performing sub-category, with some firms citing a lack of bigticket infrastructure projects to replace completed contracts.

A solid increase in residential building work underpinned the slight upturn in overall construction output during October. The latest rise in housing activity was faster than in September, but still subdued in comparison to the average for 2017 to date.

October data pointed to a marginal increase in new work across the construction sector, thereby ending a three-month period of decline. However, the rate of new order growth remained weaker than recorded at any time from mid-2013 to early last year. Survey respondents generally cited fragile client demand, with heightened economic and political uncertainty acting as a brake on growth.

The index measuring construction firms’ expectations for business activity over the year ahead signalled that optimism dipped to a 58-month low in October. Anecdotal evidence widely linked the drop in confidence to concerns about UK economic prospects and a lack of new projects in the pipeline. As a result, job creation remained subdued in October and input buying increased only marginally.

Intense supply chain pressures were recorded again in October, driven by low stocks and constrained capacity among vendors. Some firms noted that a recovery in demand for construction products across the euro area had added to cost pressures, alongside the weaker sterling exchange rate. Input prices increased sharply, but the rate of inflation remained softer than the near six-year peak seen at the start of 2017.

Tim Moore, Associate Director at IHS Markit and author of the IHS Markit/CIPS Construction PMI® : “Greater house building was the sole bright spot in an otherwise difficult month for the construction sector. Sustained declines in civil engineering and commercial activity meant that large areas of the building industry have become stuck in a rut. “Reduced tender opportunities and fragile demand are placing a dark cloud over the near-term outlook. October survey data indicated that UK construction companies are now the least confident about their forthcoming workloads since December 2012. Staff recruitment has also begun to tail off as construction companies head into the winter with heightened concern about demand conditions.

“The recent soft patch for civil engineering activity has been the most severe for around four-and-a-half years, linked to a shortfall of new contracts to replace completed work on infrastructure projects.

“Commercial building also fell in October, with survey respondents noting that concerns about near-term UK economic prospects had impacted on private investment and led to delayed spending decisions.

“Residential work has been a key growth engine for construction so far in 2017. However, some firms commented on renewed apprehension about the durability of house building outperformance, which has been achieved against a backdrop of sustained policy support and ultra-low interest rates.”

Duncan Brock, Director of Customer Relationships at the Chartered Institute of Procurement & Supply, said: “Though construction orders have shown a small improvement for the first time in four months, the sharp fall in business confidence will send a chill down the spine.

“With the lowest optimism since December 2012, purchasing managers blamed a slowdown in work from commercial clients, vanishing civil engineering projects and an increasing weariness over Brexit for the lack of performance, weak pipelines and slowdown in job hires.

“Supply chains were under the cosh again this month, as buyers struggled to get the materials and products they needed due to low stocks and squeezed supply, exacerbated by increased construction demand in the Eurozone. There were also reports of increasing shortages in some raw materials which slowed work already underway.

“Housing continued to show the strongest foundations and is set to be the main driver of growth in the coming months but the prospect of softer consumer demand and rising costs will impact. Any heavy reliance on residential building alone would be foolhardy with interest rate rises on the horizon and availability of skilled workers lacking in the sector, unless the Chancellor pulls a rabbit out of the hat and supports the training of new construction workers, the pound recovers some stability and a surge of supply capacity become available.”

Thursday, 2 November 2017

NEW Job in Focus: Sales Director for Heavyside Building Products

Our new Job in Focus is for a National Sales Director working for a manufacturer of Heavyside Building Products to Builders Merchants and Housebuilders. 

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. 


Job Title: Sales Director
Job Ref: J9643
Product: Building Products
Location: National
Salary: Negotiable (competitive)

Manufacturer of innovative heavyside Building Products, Managing a national sales team supplying Builders Merchants and Housebuilders. 

PACKAGE: Excellent package and secondary benefits scheme 

EMPLOYER: A rapidly growing and dynamic business boasting a reputation for exceptional quality innovative products for heavyside building applications. With an already established presence the company are looking for a strategic Sales Director who will provide instrumental in the further growth and development of a key division of their business 

JOB DESCRIPTION: Sales Director - You will be tasked with full strategic and commercial responsibility, managing a high volume sales division supplying products to national and independent builders merchants as well as housebuilders and regional developers. Inheriting a team of 26, your primary responsibility will be in the effective coaching, leadership and management of the sales team ensuring area, customer and national budgets and targets are met and exceeded. 

AREA: National - You will ideally be based in the Midlands 

PERSON: The successful candidate will be a proven man-manager, demonstrating success in managing a major field based sales team supplying the Builders Merchant channel. In terms of experience you will have previously held a senior position with strategic and P&L input. Product background is not critical, however an advanced understanding of the Construction supply chain, particular Merchants is key. 

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