Construction industry faces challenges

Flexible, practical approach needed in dealing with resources

5 September 2016

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The building and construction industry continues to face supply shortages of raw materials, skills and labour, as reported in the latest RICS UK Construction Market Survey. Along with financial restraints and planning and regulatory delays, the dearth of bricklayers and quantity surveyors is slowing output in the construction market, albeit it surveyors still expect activity to rise rather than fall over the year ahead. A separate report undertaken for the Construction Industry Training Board and the Home Builders Federation, expands the shortage to include plumbers, electricians, carpenters, plasterers, roofers and painters, which it says is holding back the sector. However, the UK Markit/CIPS construction PMI August report shows that the pace of decline in construction activity since the record seven-year low shown in July, was only marginal and the general picture points to one of stabilisation.

The weaker pound is now having an impact on raw material and energy supplies as exchange rate depreciation provides a catalyst for increased charges among supplies of construction materials.  Overall resource constraints are leading to programme slippage and difficulty in securing tenders, and bargaining power is shifting as the balance of supply and demand tilts in favour of contractors, who in turn are pricing for risk. George Watts, Surveyor with Cooke and Arkwright’s Building Consultancy comments, “We recognise a lack of reliable medium-sized contractors suited to the wide range of projects we are involved with in South Wales. We have always believed it is important to create and retain good relations with contractors with whom we work regularly. This is more important than ever in the current climate, along with maintaining a flexible, practical approach to dealing with material resources.”

Mansford has expanded its investment portfolio over the last few years. Over this time Andrew West has provided us with a full rating valuation service which has involved giving a view on liabilities prior to acquisitions, as well as conducting negotiations with Valuation Officers on our UK estate. The portfolio includes a wide range of properties from shops, offices and pubs to major leisure schemes. He has been particularly successful in mitigating our liabilities to empty property rate, which has been an issue on acquisition prior to implementing our development and letting strategy. I have no hesitation in recommending Andrew's expertise in rating valuation for all property types. The profile of property within his portfolio and the successes achieved are testament to his position as an extremely accomplished rating practitioner.

Leopold Hall, Partner, Mansford LLP