The UK is reportedly on track for a record economic resurgence during the third quarter of the year, with the construction industry continuing to enjoy an impressive period of growth.
City of London economists have predicted a 14.3% rise in GDP for Q3 – which is great news for the construction industry, says recruitment specialist Simon Robinson, co-founder of Red Diamond Executive Headhunters.
The Construction Purchasing Managers’ Index has also risen to 58.1 – slightly above what economists had predicted – compared with a record low of just 8.2 in April.
Although building activity shrunk by around 70% during lockdown, new figures show the industry grew at the fastest rate in almost five years during July.
House prices have risen again during August with £37 billion in property sales agreed during July, the busiest month for house buying in more than 10 years.
Construction industry insight
There are clean signs, says Simon, that the green shoots of recovery are beginning to appear – and he predicted that workers who were initially laid off back in March could be rehired in time for a busy September.
Simon commented: “Rishi Sunak’s decision to scrap stamp duty on homes below the £500,000 mark has proved to be a catalyst in getting the industry moving again. Another plus point is that the government has moved to support smaller businesses through favourable loan terms and while nobody wants to rack up debt, equally it’s vital that businesses aren’t forced to pull out of developments.
“Construction companies still have KPIs to meet, particularly in the lower echelons of the market, with starter homes especially in demand. Therefore, the appetite is there to reopen the market and I would expect to see a very busy autumn of activity, albeit with changes to the number of people allowed on site to enable social distancing.
“Britain is a proud building nation and, as we are told that people need to spend their money, what better investment is there than a house? First-time buyers especially can get great mortgage terms with no stamp duty – which means they can in turn spend more on their furniture and fittings.”
Simon added that with Brexit around the corner, more restrictions are likely to be put in place on foreign labour coming into the country, providing an opportunity for people who may have lost their jobs back in March to be rehired.
Senior management teams had taken pay freezes and even cuts to keep as many employees as possible on the books so from a recruitment point of view, there was likely to be less hiring going on further up the ladder at this stage.
And he added: “The current wave of optimism extends beyond home construction. Within the construction product industry, we now have a unique opportunity to address the issue of quantity over quality. British manufacturing is revered throughout the world and now is the time to reap the rewards of a backlash on cheap foreign imports.
“The UK needs to invest now in its home-grown producers rather looking elsewhere for the cheapest option. UK-made products may cost more but it’s money well spent and the ‘made in Britain’ stamp is rightly associated with quality and longevity.
“It’s time to move away from the false economy of buying the cheapest item on the market. Imagine, for instance, you fix a leaking sink with a cheap valve, then go away on holiday – you could come back to a flooded home.
“In the UK, we manufacture a vast range of materials used in the construction industry, from plasterboard and glass to wood products and valves. The government now needs to step up its support for the product manufacturing side of the sector – lowering tax in the long-term, for instance – to encourage businesses to invest.”
Red Diamond Executive Headhunters is headquartered in Huddersfield with a satellite office in the Middle East. With clients throughout the construction and construction product industry, the business has place candidates in leadership roles within the UK and across the globe.
For further information, visit reddiamondexec.com.