Richard Threlfall, Head of Infrastructure, Building and Construction, said: “We predict the first half of the year will be tough, not because demand will be slow but because it will pick up too quickly for an industry which has lost 20% of its capacity over the last five years and where consequently the supply chain is weak.

“At the moment we are observing shortages of bricks, blocks, timber, aggregates and also of skilled labour across the sector.

“However, more capacity in the supply chain will be opening up every day, but it will be the second half of the year at the earliest before supply catches up with demand.

085932523-8541bbf8-bf74-4edd-a6d7-a06a8e1ab2ea-3466198772-1533648608311.jpg“Until then the power will remain with the supply chain. Tier 1 contractors will continue to feel the squeeze, particularly those who chased volume during the recession and were left with wafer-thin margins.

Threlfall added: “Construction is a sentiment-driven industry and sentiment in the sector is clearly on the up. Higher GDP projections of 1.4% for this year and 2.4% for 2014 are indicative of the pace at which the recovery is accelerating.

“The construction industry usually overreacts like no other to the promise of better times.

“That reaction can already be seen in our housing market where demand is far outstripping the ability of housebuilders to deliver but it will be seen soon across other industry segments as well.

“We don’t expect any more major failures – those who survived the recession are all too big to fail – but life will remain tough in the short term.”


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An alarming new CITB report reveals 42% of construction firms are struggling to recruit workers with the right skills while one in 20 businesses fear that a lack of talent is putting them at risk of going under.

The CITB claims the skills time bomb is putting 62,000 jobs at risk.

Nearly one in five employers said that skills shortages had hampered

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their growth over the last two years, while over a tenth had lost out on work due to their competitors having a more skilled workforce.

The CITB has now teamed up with JCB to launch the Construction4Growth Skills Drive to encourage a new generation of youngsters into construction.

James Wates, Chairman of CITB, said: “Our report clearly shows that more needs to be done to address construction’s skills ‘time bomb’, to safeguard jobs and ensure that growth is possible.

“With major projects such as the new nuclear build programme coming online in the next five years, now is the time to start sparking the imagination of young people and harnessing their talent for the future of the industry – any delay now could be putting the industry’s growth on hold.

“It is for this very reason that CITB will be hitting the roads this week, visiting schools and skills academies across England and Wales with its Construction4Growth Skills Drive, to support the industry in recruiting more young people. We need to show that construction is a high-tech, world class industry with outstanding career prospects.”

 


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Refurbishing existing buildings to new standards turning them into good green assets has been identified as one of the best bets for the property sector in the year ahead, according to industry investors.

The findings, published in Emerging Trends in Real Estate Europe 2013, published jointly by the Urban Land Institute and PwC, show lenders increasingly see green buildings as a way of reducing refinancing risk. Respondents reported that sustainability credentials in real estate help maximise finance, mitigate obsolescence and underpin security of income.

 

  • Sustainable properties increasingly commanding higher rents and values
  • Regulation "forcing" people to make buildings greener
  • Green Deal could accelerate business retro-fitting

Sustainable properties are increasingly commanding higher rents and values, as governments move to force companies to increase building's energy efficiency and reduce their environmental footprint, so as to avoid potential environmental regulation linked to energy usage.

The survey, based on the opinions of more than 500 internationally renowned real estate professionals, including investors, developers, lenders, agents and consultants across Europe, found the move to 'reactivate assets' – refurbish good properties with green credentials – is taking hold. One interviewee described refurbishing buildings with green credentials as "the only things tenants want to talk about."

Interviewees, including Real Estate Investment Trusts, residential developers, banks, and investors, say environmental concerns are now intrinsic to their plans. For investors in particular, the green agenda is now tied to refinancing risks, meaning sustainability continues to rise up their agenda.

Sustainability was identified by 96% of respondents as a top business issue for industry in 2013, with 38% saying it will increase in importance again in the year ahead. Amongst other findings:

  • 96% of fund / investment managers, and 95% of banks / lenders said sustainability will have an impact on their real estate business this year.
  • 100% of residential land /homebuilders say it will have an impact on their business this year. Over two thirds say it will increase its impact.

 

In the UK, Paul Davies, partner, PwC, a specialist in the Green Deal, said the launch of the new government scheme could accelerate retro fit interest, transforming the profile of the property sector's legacy building stock.

"There's no doubt that environmentally sound properties will attract the best tenants and score plus points with lenders and investors. The Green Deal scheme is a great opportunity for businesses to make the investment cost – neutral, with increased energy efficiency being matched by a reduction in energy needs."

 

Malcolm Preston, global lead, sustainability & climate change, PwC, added:

"The property sector's view of sustainability is maturing. The next stage of the debate is a conversation not just about the environmental performance of the building, but the role the buildings play in the economic growth and social well-being of the communities around it. It's sustainability in its broadest sense."

 

The report found that sentiment in the real estate industry is more positive than it has been since 2008, despite continuing uncertainty about the macro economic outlook. While most sectors are facing pressure from changing occupational trends, the report finds there are angles for those prepared to think laterally, as technology, sustainability and demographics reshape the built environment.


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