AWMS comment: Q2 2018

Steve Durdant-Hollamby, Managing Director Alumasc Water Management Solutions (AWMS) is BMBI’s Expert for Civils, Metal Rainwater & Drainage.

Overall, quarter two has been mixed for civils, metal rainwater and drainage. In infrastructure and social housing it’s been a positive three months. The expansion of Manchester, East Midlands and Heathrow airports is generating fresh enquiries, and continuing demand in housebuilding is boosting specifications for metal rainwater, particularly in high-rise residential. However, buoyancy in these sectors is being offset by the slowdown in the commercial sector. The fall of Carillion and project delays at the start of the year due to poor weather have been compounded by the collapse of Lagan Construction and Ikon. This suggests that tight margins in the contractor market makes for an unsustainable business model. Although health and safety issues were the focus of customer confidence in Ikon’s case, their outstanding debts were still high. All these changes result in rebids which further delay projects.

The Hackitt Review, now published, looks at building regulations predominantly with reference to fire safety, but there are lessons for the whole construction industry. The report discusses the need for a fundamental change in the culture of construction including, amongst other areas, the need for accountability and respect for product specifications – despite budget pressures throughout the process. Upskilling across the board, particularly noting that system installations require skilled labour, is another issue that affects us all.

It continues to be a bumpy ride for our markets and construction overall, and it will be down to the industry to get its house in order following failures like Carillion and the tragedy of Grenfell. However, we also see evidence that performance activity levels are slowly returning, and will be in line with the CPA forecast of -0.6% by the end of this year. We expect a moderate increase in activity for freight warehousing and breweries, and continued demand in housebuilding, which will benefit builders’ merchants.

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