AWMS Comment: Q2 2019

John Coe, Commercial Director Alumasc Water Management Solutions (AWMS) is BMBI’s Expert for Civils, Metal Rainwater & Drainage.

The second quarter of 2019 was challenging across every rainwater and drainage sector, a view that was echoed by many suppliers and merchants that suggested this was industry wide.

Why the change from an apparently buoyant first quarter? There would have been an element of increased stock levels in preparation for the Brexit March deadline which overstated the sales line. More significantly, the like-for-like sales comparisons were based on a poor Q1 in 2018 which was affected by adverse weather conditions for much of the quarter.

The Brexit saga continues, and until there is some clarity, investors will hang back. There are also concerns about skill shortages, material shortages, labour inflation and possible import and export tariffs.

Against this background, how busy is the market in real terms?

Enquiry levels are ahead of last year, and our own specification teams are very busy working with architects and consultants/civil engineers. This suggests that the work is there, but the tap is currently ‘turned off’ until Brexit is resolved. But it also suggests that when the Brexit fog clears there will be healthy bank of projects that will become live.

Major projects supplied by our sector include docks and national and regional airports where the pipeline seems to be continuing. During Q2, AWMS undertook a major project of our own and successfully relocated our Gatic civil drainage division to our Halstead site (Wade Head Office). This was a £750,000 investment which will improve the manufacturing efficiencies and provide a solid platform to grow the civil drainage business.

Across all the AWMS business units, we are also seeing an increase in the requirement for more bespoke solutions. This can be anything from a tweak to a standard component to an out and out project specific solution.

We see the outlook for Quarter 3 as again being challenging across most of the sectors we service. The uncertainty is having a negative impact, and not just within the construction industry.

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