BREXIT: Construction Reasons to be Cheerful

BREXIT: CONSTRUCTION REASONS TO BE CHEERFUL

Posted 28/03/2019 by Emma Blair

Amidst the Brexit drama, as the construction industry collectively struggles to gain some momentum after a tough 2018, I would just like to remind myself (and any readers) that there are still reasons for our wonderful candidates and clients to be cheerful.

 

Yes, there is a lot of debt floating around, bigger PLCs are squeezed like never before, and companies such as Kier and Interserve are never far away from the (sadly) negative headlines, but here are three reminders of silver linings that are there if we look for them:

 

Smaller firms are hitting juicier margins.

While the bigger contractors have struggled to make any margin in recent times, analysis by Construction News shows that firms between £300-£500m are managing to hit higher margins. The top 25 companies have squeezed in margins of 0.2% over the past year, while many smaller companies (in the bracket above) have managed to operate on a much healthier median 5% pre-tax figure. Unlike the PLCs, they have no obligation to grow, they are generally privately owned, and they don’t have to chase the riskier projects. They typically carry out more specialised work and they are continuing to invest in their people accordingly. Anecdotally, they are becoming more attractive employers in what are troubled times.

 

PFI was abolished, but the industry will find a better solution for private sector financing.

Was the way in which the private finance initiatives were structured really that effective? Many argue that both taxpayers and construction firms could find more profitable solutions. Two of Highways England’s flagship schemes (for example) were adversely affected by Philip Hammond stopping the funding scheme, but there were many more examples where it really didn’t work out that well. (Liverpool City Council paying £4m a year for an empty school is the classic example of bad PFI). Schemes to bring private money into construction while the public purse is protected are likely to see far more success.

 

Attitudes to diversity, mental health and wellbeing are high profile.

We have written about the importance of mental health in our industry before, and as the news highlights the struggles of the latest construction giant, it is important to put our industry in perspective. Yes, we are reliant on cyclical growth, but construction forms the bedrock of everything that is good about our society. We are building to improve the lives of everyone around us, and we have to take great pride in that. Also, as we increasingly diversify our workforces, the shifts in culture will help us to become more resilient.

 

As recruiters, we are seeing a lot of candidates come through our doors who are remarkably positive about their prospects over the coming year. Our industry has never had so many tools in place to invest in its people, and the employers of choice know that attracting and retaining the very best talent is the one sure way of building a brighter future.

 

Times might be tougher, but the companies who value talent are the ones that will win.

 

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