Housebuilders optimistic despite market uncertainty and skills shortage
Despite challenges including the current planning system, a skills shortage and uncertainty following...
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Despite challenges including the current planning system, a skills shortage and uncertainty following the EU Referendum, housebuilders are forecasting increased growth and investment in the sector. Over a third say that the uncertainty following the EU referendum result is their main challenge, with other challenges including the rising cost of raw materials, the current planning system and industry skills shortage
The second annual Lloyds Bank Commercial Banking report on the UK housebuilding sector analyses the state of the industry today, and the opportunities and challenges it faces in the future.
The report is the first in-depth study of the sector following the decision to leave the European Union in June 2016. Although over a third of firms (36 percent) said that the uncertainty following the EU referendum result is the biggest challenge to their business, the industry is relatively optimistic; planning to grow, invest and create jobs.
Confidence to invest
The research found that, in the face of ongoing uncertainty, optimism about the future of the housebuilding industry has picked up slightly from 7.1 last year to 7.2 in 2016, with 10 representing the highest level of expectation.
It seems that this outlook has given the industry the confidence to invest, with average five-year investment plans up 17 percent year on year.
Housebuilders are also confident about growth, with 42 per cent of respondents saying that their growth forecasts had improved since the EU vote, compared with 27 percent who said they had declined. They are now predicting an average growth of 28 percent over the next five years, up from 25 percent last year.
Wider Sector Challenges
The remaining challenges that the sector highlighted, after the EU referendum result, include the rising cost of materials (35 percent) and the current planning system (29 percent).
While the UK continues to face the housing shortage head-on, more than one-fifth (22 percent) of housebuilders do not believe the sector has the resources it needs to help the Government achieve its targets for new housing, and 14 per cent are unsure.
Firms also said that the availability of government support (32 percent) and suitable land (29 percent) are factors that impact the industry’s ability to meet targets for new housing.
Addressing the skills gap
Almost a third (30 percent) of firms said there are not enough skilled workers in the industry, with bricklayers, electricians, plumbers and joiners being the hardest to recruit. This shows a slight improvement from the 2015 survey from 35 percent.
Recruitment and skills therefore remain a focus, with three of the top priorities for firms over the next five years being recruiting additional staff (52 percent), and investing in training (49 percent) and apprenticeships (32 percent).
A quarter (25 percent) of firms are still planning to create jobs to support growth, but this is down from 31 per cent last year. And the scale of planned workforce growth has also fallen back to 22 percent, from an average of 31 percent of the current workforce over five years in 2015.
Despite the fall in plans to recruit, the sector still looks set to create more than 70,000 jobs over the next five years.
Pete Flockhart, Head of Housebuilders, Commercial Banking, Lloyds Bank, said: “Given the challenges that housebuilders face, the sector is painting a relatively optimistic picture, with improved growth and investment forecasts compared with last year’s survey.
“The wider uncertainty, coupled with the rising cost of materials, presents some challenges but the industry is taking steps to tackle these issues head on, and still plans to grow.
“Businesses are confronting the much-mooted skills shortage and it is encouraging to see that almost half of the industry is making staff training a key focus and nearly a third is prioritising apprenticeships.
“Housebuilding is a key sector for the UK, driving economic growth but also delivering much needed homes which are critical to our communities. We are therefore fully committed to the sector, not just through our continued financial support to our clients to support their growth ambitions, but also by providing solutions such as our Housing Growth Partnership. This is a £100m dedicated joint venture with the Government to invest between £500,000 and £5 million to increase the supply of new homes by supporting small and medium sized housebuilders.”
Stewart Baseley, Home Builders Federation, said: “The industry is pushing the skills agenda hard. If we are to build more high quality homes we simply have to increase industry capacity. We are looking at how we build our individual sites more quickly; and the measures Government could introduce to allow SME builders to play their part in delivering more homes.
“If we can continue to create an environment in which the industry can grow, as well as delivering desperately needed new homes, we can play a huge part in driving our economy forward.”
Read the November 2016 issue of Construction Global magazine
Environment Agency clamps down on plastic films and wraps
Businesses in the waste and construction industries must ensure they deal with waste plastic properly to stop illegal exports, the Environment Agency (EA) has warned.
The warning comes as the Agency is increasingly aware of plastic film and wrap from the construction and demolition sector being illegally exported.
Exports are frequently being classified as ‘green list’ waste of low risk to the environment, but are often contaminated with materials such as mud, sand, bricks and wood, posing a risk to the environment and human health overseas, and undermining legitimate businesses in the UK seeking to recover such waste properly.
During the last year, the EA has intercepted shipments to prevent the illegal export of this material on numerous occasions. The Agency inspected 1,889 containers at English ports and stopped 463 being illegally exported. This, combined with regulatory intervention upstream at sites, prevented the illegal export of nearly 23,000 tonnes of waste.
Those convicted of illegally exporting waste face an unlimited fine and a two-year jail sentence. But construction firms could also face enforcement action if contaminated construction and demolition waste plastic is illegally exported.
Malcolm Lythgo, Head of Waste Regulation at the Environment Agency, said it is seeing a marked increase in the number of highly contaminated plastic film and wrap shipments from the construction and demolition industry being stopped by officers.
“I would strongly urge businesses to observe their legal responsibility to ensure waste is processed appropriately, so we can protect human health and the environment now and for future generations. It’s not enough just to give your waste to someone else - even a registered carrier. You need to know where your waste will ultimately end up to know it’s been handled properly. We want to work constructively with those in the construction and waste sectors so they can operate compliantly, but we will not hesitate to clamp down on those who show disregard for the environment and the law.”
There are a number of simple, practical steps that businesses can take to ensure that C&D site waste is handled legally.
Construction businesses should check what’s in their waste
- Different waste types need different treatments and so must be correctly categorised to ensure it goes to a site that is authorised to handle it safely. Businesses can also check if their waste is hazardous as different rules might apply.
- If you are removing the waste yourself, you must be a registered waste carrier- registration can be carried out here. When a waste collector is transporting your site waste, you must check they have a waste carrier’s licence from the EA.
- You must also check that the end destination site any waste is taken to is permitted to accept it and has the right authorisations in place. Keep a record of any waste that leaves your site by completing a waste transfer note or a consignment note for hazardous waste which record what and how much waste you have handed over and where it is going.
Waste management industry must adhere to export controls
- Contaminated C&D waste plastic - including low-density polyethylene (LDPE) wrap and film - must be exported with prior consent from the EA as well as competent authorities in transit and destination countries.
- Those involved in the export of such waste must ensure that it meets the requirements set under the relevant export controls, such as being almost free-from contamination; the destination sites are appropriately licensed to receive and treat the waste; and waste is correctly managed once received.
The EA will continue to actively target those who export contaminated C&D plastic waste illegally, including any accredited packaging exporters who issue Packaging Waste Export Recovery Notes (PERNs) against such material in breach of their Conditions of Accreditation.
Businesses involved in the shipment of waste are required to take all necessary steps to ensure the waste they ship is managed in an environmentally sound manner throughout its shipment and during its recycling.
Anyone with information regarding the illegal export of waste including C&D waste plastics can contact the EA’s Illegal Waste Exports team at: [email protected] or anonymously via Crimestoppers on 0800 555 111 or via their website