2018 has been another year of continuous and fractious challenge for the construction industry. While much of the industry was negatively hampered by the poor weather enduring from winter into spring, it was hoped that the return of the sunny weather would return the British construction industry to its prominent best.
That, sadly, has yet to truly take part. While builders are back out and enjoying the sun in earnest, there has been a significant slowdown in construction projects due to the prevailing rate of high street closure. With high street closures now hitting a high level, it’s unlikely that even an extended summer could help to make up for the shortfall in genuine construction opportunities.
The May recovery that started off so well soon began to hit a negative point, with reduced demand from retailers unable to find high street stores they can afford killing opportunity. This is, alarmingly, the fourth decline seen in just five months. This shows the dire state of the construction industry, and it could play a significant role in the long-term health of the industry in 2018 and beyond.
Indeed, it was hoped that the good weather might correct this problem. The Beast from the East storm stuck around longer than expected, and it caused significant delays in February and in March. However, by May the HIS Markit/CIPS construction PMI remained at 52.5 points in May. It was hinted that the mini-revival would be short-lived and that has turned out to be the case. While house building is enjoying a relatively healthy period, commercial and civil engineering is at a major standstill.
With the likes of the European Union exit looming large, it feels like many projects have been put on a long-term hold moving forward.
Reduced Demand
Sadly, as people feel the pinch to their purses, it’s hard to then invest in stores. This means that businesses have less opportunity to succeed, which when paired with high street rental costs means it’s hard to see this cycle being broken. Even major retailers like Marks & Spencer have had to make closures due to the reduced demand and usage of a significant portion of their stores.
Indeed, job creation in the building industry was at a four-month low in May, and companies also found that skills shortages were commonplace, creating an uneasy and hard to solve problem. With purchasing prices and fuel costs hitting the roof, plastic and steel have also risen in price which means that many of the most critical commodities in the industry are no longer as affordable as they once were.
These major industry ruptures are making it much tougher for key business to be done and may play a long-term role in the construction injuries ailing conditions. With skills shortages mixing with a lack of opportunity, the solutions are hard to pinpoint at present.
For all the hope of a quick recovery after an adverse winter, hope is quickly being dashed in many quarters. Solutions will need to be found to make the second half of 2018 more productive.