Survey reveals how the EU Referendum is impacting the Construction Industry

A special question was asked on the EU Referendum as part of the latest Markit/CIPS UK Construction PMI survey and unsurprisingly it revealed uncertainty of the outcome of the forthcoming EU referendum is having a detrimental impact on the current business performance of around one-third of UK construction companies. 

When asked whether the issue of the UK’s potential exit from the European Union is currently having an impact on their business, some 30% of surveyed companies that answered the question commented on a ‘detrimental’ effect, while a further 5% indicated that the impact was ‘strongly detrimental’. Conversely, just 1% reported a ‘strongly beneficial’ effect.

Over half (55%) noted no significant impact, while one-in-eleven respondents were unsure whether ‘Brexit’ worries were a factor impacting on their business (9%).

Looking at the nature of the impact on construction firms, nearly one-third of respondents commented that Brexit ‘uncertainty’ was making it difficult to make business decisions (32%), with a similar proportion noting an adverse impact on their sales (around 34% of construction firms indicated a detrimental impact in this area).

Only a small minority (16%) of construction companies reported that costs were also being adversely affected by the EU referendum uncertainty, while around one-in-four (26%) commented on a detrimental impact on profits. Investment and planning decisions were similarly also hampered (26% of construction firms).

At the same time, the vast majority of the survey panel (73%) reported no significant effect emanating from uncertainty over ‘Brexit’ on their ability to hire suitable staff.
Data were collected between May 12th-27th.

UK construction sector remains upbeat despite slowdown in May amid first drop in new orders since April 2013

UK construction firms experienced another difficult month overall in May, with output growth easing to its weakest for almost three years and incoming new work declining for the first time since April 2013.

Survey respondents noted a general slowdown in market conditions and delays to client decision making ahead of the EU referendum.

Key points:

• Marginal overall rise in business activity
• Incoming new work declines for the first time in over three years
• Input buying stagnates in May, but job hiring hits four-month high

However, there were signs that construction companies remain relatively upbeat about the growth outlook, with more than half of the survey panel (51%) expecting a rise in output over the next 12 months and only one-in-seven (14%) anticipating a fall. As a result, job creation picked up in May and reached a four-month high.

The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index® (PMI®) posted 51.2 in May, down from 52.0 in April and only slightly above the critical 50.0 no-change mark. The latest reading signalled the weakest overall rise in business activity for almost three years. All three broad areas of construction activity were stuck in a low gear during May. Residential building work increased at one of the weakest rates seen since early-2013, while growth of commercial activity was the slowest for nearly three years. Civil engineering stagnated in May, which made it the worst performing sub-category of activity for the second month running.

May data signalled an outright reduction in new order volumes for the first time since April 2013. Anecdotal evidence pointed to a general lack of client confidence, driven by heightened uncertainty about the economic outlook. Moreover, a number of firms noted reluctance among clients to place orders and commence contracts until after the EU referendum.

According to a special question added to the survey this month, around one-third of respondents have seen a detrimental impact on their business from uncertainty regarding the forthcoming vote. Further details are provided in the research note following this press release.

A reduced flow of incoming new work contributed to cautious stock policies and input buying at construction firms in May. Reflecting this, the latest survey pointed to stagnation in purchasing activity across the construction sector. However, staff hiring was maintained in May, which marked three years of continuous job creation. The latest increase in payroll numbers was the fastest since January, which construction companies linked to new project starts and high levels of orders-in-hand.

Meanwhile, construction firms noted a moderate deterioration in supplier performance, continuing the downward trend seen since September 2010. A robust pace of input price inflation was also recorded in May, although the latest rise in average cost burdens was slower than April’s nine-month high.

Looking ahead, UK construction firms are upbeat overall about the year-ahead outlook, with just over half of the survey panel forecasting a rise in output. The degree of optimism was up fractionally since April, but still at one of the lowest levels seen over the past three years. Survey respondents linked this to heightened economic uncertainty and concern that softer market conditions will persist into the second half of 2016 (especially in the housing sector).

Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI®, said:

“Construction companies are facing a challenging second quarter of 2016, with growth headwinds apparent across all three key areas of activity. May data signalled the worst month for commercial building since June 2013, while residential work and civil engineering activity both saw a renewed loss of momentum.

“Survey respondents noted that the forthcoming EU referendum has disrupted new order flows and the timing of client decision making in particular. Heightened uncertainty and subdued general economic conditions in turn contributed to the first outright fall in new work received by construction firms for just over three years.

“The main positive aspect was a pick-up in staff hiring to its fastest since the beginning of the year. Positive employment trends not only contrasted with falling new order volumes in May, but the gap between these indices was the largest since the survey began in 1997.

“An optimistic interpretation is that construction firms are looking through the second quarter weakness and feel that workloads will recover momentum.However, should this fail to materialise later in 2016, then job creation is likely to come under pressure given its elevated trend relative to current demand patterns.”
Commenting on the report, David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, said:

“The sector appeared to have taken residence in awaiting room of non-activity, as continuing poor global economic conditions and uncertainty around the EU referendum impacted growth and new orders.

“Supplier performance degraded and continued its downwards trend which began in September 2010. Purchasing activity ground to a virtual standstill.

“The chink of light appeared to be the industry’s optimism for the future and an indication that that this may be a short-term situation as employment continued to rise to a four-month high and job creation has been continuous for three years. Once again the industry holds its breath to see what the coming months will bring as housing sector growth in particular remains weak.”

VictoriaPlum.com adverts go down the pan!

The Advertising Standards Authority (ASA) has upheld a ruling to ban a television and website advertisement by VictoriaPlum.com that stated the online retailer's prices were “40% lower than Bathstore”. 

According to ASA, Bathstore challenged whether the claims by VictoriaPlum.com in its advertisements from September last year – were “misleading and could be substantiated”. In response to the challenge, VictoriaPlum.com “said they had engaged an independent third-party company to match products on Victoria Plum’s and Bathstore’s websites and which was completed autonomously, without influence by Victoria Plum”.

The company also stated it checked Bathstore's prices “twice daily” to ensure a minimum of 10% of all matched products exceeded the 40% discount. According to the company, 176 of its products were matched with products from Bathstore, with 67-83 products cheaper by at least 40%.

“The number of products that were up to 40% cheaper fluctuated during the time the ads appeared due to Bathstore changing their own prices,” the ruling by ASA states. “Therefore, comparable stock was a relatively low proportion of their overall stock, but they [VictoriaPlum.com] believed the adverts made that clear.

“Because Victoria Plum’s ads suggested a significant proportion of their products were lower in price than comparable products from Bathstore, which was not the case, we concluded the claims were misleading and had not been substantiated,” the ASA said.

View the latest bathroom products sales jobs>>

The ruling marks the third by ASA regarding VictoriaPlum.com since March this year, when the authority banned three adverts by the retailer that had been challenged by consumers and its competitor Victorian Plumbing. In April, the ASA banned another VictoriaPlum.com advert after Victorian Plumbing challenged it.

In which job function are you looking to recruit?

It seems that the real importance to a company's success of happy and good employees is now being more clearly understood. Companies are adopting a more considered and focused approach to their recruitment policy to ensure this happens.

It is important to make the right recruitment decisions: focusing on particular disciplines, as well as the type of people you want to hire as well as how you develop and treat them after they have been hired.

In construction industry sales and marketing roles, there are a number of job functions you can recruit for to help ensure you maximise your business potential quicker and more successfully than your competition.  

Field Sales Options
High-impact positions are often targeted, e.g. field sales roles, as they are vital to ensure that you secure every bit of business out there. But – should you be focusing on standard ‘Account Sales‘ or on ‘Specification Sales’ with its possible more lucrative long-term benefit? 

Getting the balance between the long and short-term view can be an important and difficult call to make. 

Are you finding the changing nature of the market means you can’t ignore securing specifications as part of your sales strategy? This certainly seems to be the case with the amount of specification sales roles we’ve had available recently.

Read our guide on 'What is Specification Sales?'

Internal Sales Options
Some companies are now enhancing their internal sales team to reduce the pressure on external sales and provide a more instant and technical response to customers’ needs. 

This can also be seen as proactive, as it ensures customers are being more regularly contacted as part of a support function - the more focused companies are exploiting this to their advantage.

Of course, it also helps to process orders more efficiently and keep customers advised on order progress, so that you are seen as reliable and an excellent long-term business partner.

Read our feature on the importance of internal sales in the construction industry

Marketing / Product Development Options
These were the areas that seemed to have been hit first in the recession, when really they should’ve been the key areas to support and focus on. Investment in marketing and product development helps ensure your product differentiation is clear which helps your sales team. 

The future of your company is more assured if you have new products and services that meet the changing needs and regulations of the construction market. 

Do you have a long-term road map for new product introduction or enhancement? If not, it is something you should be thinking of developing now.

Along with specification sales, these are areas where we are now seeing a significant increase in construction companies’ recruitment.

More on construction marketing jobs

Developing and rewarding loyal members of staff
During the dark days of the recession, we found many people were given extra duties to maximise their value. Hopefully, many companies will have found some hidden gems within their teams and will now reward them with new or enhanced roles. If you’ve found a good team member, cherish them, invest in them and let them develop even more. Don’t lose them, but recruit more good people who will grow with you and add real value.

Of course, it’s not always that simple and some companies just have to get on with it the best they can. Those who survived and want to thrive are often those who had the best and most adaptable employees in the first place. 

The key thing to remember is: your recruitment policy affects you even when you are not in recruitment mode, but if you are, consider where you need to be making appointments. Don’t think that just because it was right years ago, it will be right now. Times have changed.

If you want to discuss the best way forward to develop your sales and marketing teams, please contact us to discuss your requirements on 01480 405225 or take a look at our website www.pinnacleconsulting.co.uk

Job in Focus for June: National Sales Manager for Luxury Bathroom Products - £75k + bonus

Our latest Job in Focus is a national role selling Luxury Bathroom Products and a opportunity to prove your management skills managing a team of Area Sales Managers covering all channel sectors including Retail, Specification & Contract. As National Sales Manager you would inherit a strong team who are very experienced in their own dedicated channel

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 Title: National Sales Manager
Job Ref: J7636
Product: Bathroom Products
Location: National
Salary: £75k

National Sales Manager opportunity, working for a market leading manufacturer of luxury bathroom products. 

PACKAGE: Basic salary £65k to £75k plus Bonus Scheme, Car, Healthcare, Pension & other company benefits plus the opportunity to join a fantastic brand. 

EMPLOYER: Our client are a market leading manufacturer of luxury bathroom products boasting an excellent reputation. They are now looking to grow significantly and offer a superb opportunity for someone to develop their career in a true market leader. 

JOB DESCRIPTION: Superb opportunity to prove your management skills managing a team of Area Sales Managers covering all channel sectors including Retail, Specification & Contract. This person will inherit a strong team who are very experienced in their own dedicated channel - this person will need to be capable of understanding the differences between selling via Retail, Specification & Developer sectors and be comfortable being the visible face and voice to key customers in all of these sectors. They will be expected to set & monitor targets providing strong growth and motivate the team to achieve and surpass these targets. 

LOCATION: National role so someone living centrally would be advantageous including, West Midlands, Birmingham, Manchester, Yorkshire, Staffordshire, Leicestershire, Northamptonshire, Nottinghamshire, Worcestershire, Warwickshire, Oxfordshire, Hertfordshire, Berkshire, Buckinghamshire etc 

CANDIDATE: We are looking for a high calibre manager with a clear background in the Bathroom industry - preferably with strong experience in the Retail channel 

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

Search for more building products sales jobs >>>

BMF report strong Builders Merchant Sales Growth for Q1 2016

Sales in the builders merchants industry for Q1 2016 have increased according to new figures with Landscaping Products, Heavy Building Materials, Timer and Joinery, Heating Electrical, KBB, and Decorating Products significantly helping to drive this growth.

The latest sales figures from GfK’s Builders Merchants Panel, released by the Builders Merchants Federation (BMF) in the Builders Merchants Building Index, show sales in Q1 2016 through the UK’s general builders’ merchants were up both on the last quarter and on the same quarter in 2015.

Sales in Q1 2016 were up by 5.4% on Q1 2015 with total ex VAT sales-out of £1.27bn compared to £1.20bn.  Q1 sales also rose by 4.6% on Q4 2015.

There was strong growth throughout each of the first three months of the year, with both January and March showing 2% growth year on year despite one less trading day in each month.

Year on year sales of Landscaping Products were particularly strong (+10.7%).  Other major product areas also delivered excellent growth with Heavy Building Materials up 5.2%, Timber & Joinery Products up 4% and Plumbing, Heating & Electrical up 7.3%.  Interior products also performed well with sales of Decorating & Renovation Products increasing by 5.1% and Kitchens & Bathrooms up by 3.9%.

The data shows year on year growth in all but one sales category, with Renewables & Water Saving Products down by 26.7%.  This is, however, a very small element of total merchant sales with any volatility likely to produce a wild swing.

If you are interested in a sales job in the builders merchant industry, find out more here...

The main drivers for growth are Heavy Building Materials and Timber & Joinery Products, with respectively 46.6% and 21% of total builders merchants’ sales during the last quarter. Both Landscaping Products (7.2%) and Plumbing, Heating & Electrical (5.7%) marginally increased their share of total sales, up by 0.4% and 0.1% respectively, while Kitchens & Bathrooms maintained its 4.7% share.

BMF’s Managing Director, John Newcomb said: “The year on year and quarter on quarter growth evident in builders merchants sales is clearly encouraging.  It is also at odds with the recent ONS figures that reported construction output down by 1.9%, which have already been challenged by the Construction Products Association.  Our data is in line with the CPA’s Q1  survey. ONS figures have been revised in the past, so they may yet come back with a more positive picture that reflects what is actually happening in the market.”

BRE Academy launches new eLearning platform

BRE’s training and education arm, the BRE Academy, has launched a new eLearning platform (bre.ac) designed to meet the changing needs of the construction operatives, professionals and leaders in the UK and around the world.

With an initial 25 digitally delivered courses ranging from BIM Essentials and BREEAM Associate to Manging Change - Risk in Construction, the aim of bre.ac is to make and deliver quality education and training more accessible to time poor people and organisations needing to upskill. Courses carry recognised qualifications* and CPD certification** and are developed by leading global experts in the field.

At a time when the skills shortages and gaps are thought to be significantly hindering progress in the construction sector, 250 modules of the new platform's BIM Essentials course were sold during the live beta testing stage of the site with multiple sales for staff in world renowned design and engineering consultancy BDP.

‘BDP sees the BIM Essentials online training course as an important step along our BIM journey. By providing a flexible learning platform that addresses the UK BIM Level 2 mandate and associated processes we will raise awareness and knowledge across a wider staff base, moving past software training and ensure job runners have skills necessary to address BIM Level 2 and beyond’.  

BRE Academy Director Pauline Traetto said ’One of the key issues we identified in our recent skills gap survey was the need for accessible learning via the web and mobile that fits around the people rather than the training providers - bre.ac represents the positive action we decided to take in response to this. The early indications from course sales data are most encouraging with several hundred people accessing learning in their workplace, while commuting on the train and in the comfort of their home. With the global online training market predicted to grow by 18% by 2020, for us this is the future of learning’

For further information please contact Linda McKeown, BRE, email linda.mckeown@bre.co.uk or go to www.bre.ac

CPA reports strong Q1 but 'uncertainty' is the theme for Q2

The Construction Product Association’s latest Construction Trade Survey shows that construction activity increased across the supply chain in Q1. This was the twelfth consecutive rise reported by construction product manufacturers representing the beginning of the supply chain, through to main contractors, specialist contractors, SME builders and civil engineers carrying out work on the ground.

Commenting on the survey, Rebecca Larkin, Senior Economist at the CPA, said, “After a slowdown at the end of last year, firms throughout the construction industry experienced a stronger opening quarter in 2016. In spite of this, the clear theme for Q2 is uncertainty, with main contractors reporting lower orders in all sectors as projects are paused or postponed ahead of the EU referendum in June.

“Beyond that, firms continued to indicate that a shortage of skilled workers is the largest threat to construction activity over the rest of the year. Main contractors reported difficulties in recruiting bricklayers, carpenters and plasterers in Q1, whilst low availability of labour was also reflected in upward pressure on wage bills among product manufacturers and civil engineers.”

Take a look at the latest Construction Sales Jobs >>

Suzannah Nichol, Chief Executive of Build UK said, “There continue to be mixed messages in terms of growth; however, industry intelligence shows increasing levels of activity over the last quarter. Employers are experiencing both rising material and labour costs as they head towards maximum capacity and this continues to highlight difficulties in recruiting appropriate skills at all levels. Build UK is leading the way on the war for talent with its members opening their projects up to the public during Open Doors week in June to attract the brightest talent to projects at a both local and national level.”

Richard Beresford, Chief Executive of the National Federation of Builders, said, “Uncertainty over the outcome of the EU referendum and over the nation’s defining issue – housing – is reflected in slowing industry performance. While homes will continue to be built, as long as there is uncertainty over government policy, we will not be able to provide anywhere near the number of homes people need.”

Key survey findings include:

• 19% of main building contractors, on balance, reported that construction output rose in the first quarter of 2016 compared with a year ago
• A balance of 38% of specialist contractors reported a rise in output during Q1
• On balance, 13% of SME contractors reported increased workloads in Q1 compared to three months earlier
• A balance of 13% of main contractors reported a decrease in orders in private housing and 42% reported a decrease in public new housing orders
• 25% of SMEs and 21% of specialist contractors reported an increase in enquiries in Q1, on balance
• 13% of civil engineering firms reported an increase in new orders in Q1, on balance
• 50% of main contractors reported difficulties recruiting carpenters, 40% for bricklayers and 36% for plasterers in Q1
• Overall costs increased for 74% of civil engineers contractors, whilst 42% of main contractors reported labour costs rose in Q1 compared with the previous quarter
• 100% of heavy side product manufacturers reported that wages and salaries increased from a year earlier

Job in Focus: Product and Marketing Director for Bathroom Products - £80k + benefits

Our latest Job in Focus is a fantastic executive role, you would become the Product and Marketing Director for a leading supplier of high end bathroom products.This strategic position will see the successful candidate take ownership of the marketing function as well as product management and development. You would be responsible for a team of 10 people.

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 Title: Product & Marketing Director
Job Ref: J7552
Product: Bathroom Products
Location: South West
Package: Up to £80k plus other excellent company benefits. 

EMPLOYER: A higher regarded and well established supplier of luxury bathroom products boasting an excellent reputation for customer service and product innovation within Europe and across the World 

JOB DESCRIPTION: Due to continuing success and growth, the company are recruiting for a Head of Product Development and Marketing role reporting to the Managing Director. This position will see the successful candidate take ownership of the marketing function as well as product management and development. The successful person will manage 2 Product Development Engineers and a Quality Manager via a Product Manager and 2 Graphic Designers, a Communications Manager, a Displays Manager and a Marketing Coordinator via a Marketing Manager. Additional responsibilities will be to ensure the company has an aggressive and outward strategy and direction for bringing new products to market and driving the products into key retail, merchant, specification and export channels. 

AREA: Office based in the South West so applicants could live in Wiltshire, Gloucestershire, Somerset, North Somerset, Dorset or Devon 

PERSON: The ideal candidate will come from a senior strategic position with experience influencing at board level. Other key attributes include someone who is capable of holding strategic responsibility, budgetary responsibility as well being an excellent project manager in terms of product launch / category management / NPD and a senior level marketer. Product knowledge is not important and the client would welcome exception level applications from those within the construction market or FMCG sectors. 

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