Opinion: Hopes for the New Year

Grant Prior 12 years ago

It was certainly a tough-time for construction throughout 2010 as the industry continued to bump along the bottom of the fledgling recovery.

Official Government figures showed construction leading the long-haul out of recession.

But Whitehall’s bullish numbers mystified most in the industry who were working in the real world of falling workloads and intense competition in tender contests across all sectors.

The big hope for 2011 is that an increase in private sector work will compensate for the decline in publicly funded projects.

The coalition’s cuts are yet to fully kick-in with figures for last month showing that public spending actually increased during the last few weeks of the year compared to 2009.

But that is all set to change in 2011 when the government’s economy drive will be felt across the whole of the industry as the brakes are put on school, health and transport infrastructure and maintenance.

General unemployment is set to rise with construction expected to be among the  worst hit sectors as local authorities shed workers and job losses outnumber hirings among private contractors.

But not everything is doom and gloom for the New Year and the key for contractors during the next 12 months is to hunt out those sectors that still offer a decent return.

The commercial market is showing signs of revival with the hope that the return of speculative developments in London will spread to other parts of the country.

The hotel sector shows no signs of slowing while the student accommodation boom continues despite fears over student fees as foreign undergraduates flock to the UK to study.

The government has committed at last to a nuclear new build programme but construction work will be dominated by a handful of specialists who will be in line for some eye-wateringly large contracts.

Spending has dipped slightly in the infrastructure sector but the water, gas and electricity companies will continue to offer a steady stream of opportunities throughout the year.

Housing faces another challenging 12 months with a lack of mortgages set to keep house building figures at their current historic low levels.

Perhaps the biggest threat throughout 2011 will be suicide bidding as desperate contractors cut their prices ever lower to keep turnover going.

The situation is being made worse by clients who are happy to stand back as firms slug it out then benefit from the lowest price.

But cut-throat tendering is a false economy for all. It sends firms to the wall and leaves clients with jobs half-finished when contractors go bust.

There is no doubt 2011 will be a challenge. But construction survived the depths of the latest recession and adaptable contractors will still flourish however tough the conditions.

We will be here to report all the latest news and views throughout 2011 and everyone at the Enquirer wishes the industry a happy and prosperous new year.

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