Will we see some of the property sector’s problems solved in 2015?
At this time of the year it is the common custom to look back, to review, to place into context the trials and tribulations of the previous 12 months. But for me, it is always the forward predictions for the built environment that have greatest resonance. I want to know what to expect.
This year will be marked by the general election and confidence will only really return to the majority of the market if a clear outcome is achieved, a decision made regarding Europe and a specific direction of travel declared. Looking at the polls, this seems unlikely. Whatever the outcome, I expect there to be more infrastructure spending and an ever-increasing desire to ramp up housebuilding from all the parties.
The challenge facing a hungry construction industry is the ever-worsening skills shortage. National headlines before Christmas showed us the £1,000-a-week bricklayer starting to emerge again. This may be a London phenomenon and if you are reading this in Newcastle you probably regard the sums as ridiculous. Nevertheless, there is an increasing realisation everywhere that demand is exceeding supply for skilled craftspeople and this is affecting pricing. I predict that there may well be a joint offering from a reinvigorated Construction Industry Training Board and the Department for Business, Innovation and Skills to review and revise the apprentices training programme in the near future.
And who knows? Perhaps this year our industry will finally embrace and encourage a good potential source of skilled labour that has too long been turned off from our sector — women.
I also predict more and more contractors will be choosy about the projects and clients they wish to be involved with. This is mainly a South East and London issue at present, but I believe a contractor shortage will resonate more widely next year and affect costs. Research shows main contractors are turning down a third of opportunities on the grounds of risk, price or more often because they cannot guarantee to meet imposed timelines and don’t want to face fines.
Finally, if 2015 proves to be a year of common-sense commercial activity then all the better. I would rather have a slower growing, more manageable but sustained construction and property market with lasting stamina than yet another boom-and-bust scenario.
Richard Steer is chairman of Gleeds Worldwide.
Opinion piece first published in Property Week on 9th January 2015.