Steelwork contractors ready to cope with forecast demand surge

Aaron Morby 8 years ago

Constructional steelwork contractors will be able to gear up for an expected surge in demand over the next few years without supply bottlenecks.

A new report from KPMG into the  UK steelwork contractors capacity concludes that there is  sufficient capacity to meet forecast demand for constructional steelwork, without the need for capital investment.

Constructional steelwork contractors are forecasting strong steady growth for several years ahead built on the back of a boom in shed and office construction.

These sectors will drive growth by 4.3% this year and 3.5% in 2017 lifting the industry back to over 1m tonnes output for the first time in seven years, according to latest forecasts from the British Constructional Steelwork Association.

Richard Threlfall, KPMG’s UK head of infrastructure, building and construction, said that the required increase in constructional steelwork output could be achieved through a combination of increasing shifts, use of agency staff, and fully utilising current production facilities, without the need for any capital investment.

KPMG estimates steelwork contractors hold latent capacity for between 1,142,000 and 1,343,000 tonnes against forecast demand for constructional steelwork of 1,050,000 tonnes in 2019.
The report notes that recent events in the wider steel-making industry do not provide a material short term threat to the supply chain.

Sarah McCann-Bartlett, BCSA’s Director General said: “It is clear that with sufficient UK capacity to meet future demand for constructional steelwork, there is every reason to use a UK steelwork contractor.

“Using a UK steelwork contractor means shorter lead times, contractual security, exceptional quality of design work, better logistics on site and an excellent health & safety record,” she said.

The BCSA said that while general tender price forecasts showed ongoing cost inflation across the construction sector, in particular as a result of wage increases, the latest cost modelling of typical office projects by Gardiner & Theobald showed that compared with a comparative concrete building, steel construction is 7% cheaper and 5% quicker for a low rise business park office, and for a city centre high rise, the cost is 4% lower and the programme 11% shorter.