Here’s a recent snapshot of prospects and sentiments in the UK construction industry compiled by a long-standing media colleague of mine, Mel Budd.
The Construction Industry Barometer is produced by Leading Edge Management Consultancy in conjunction with the Chartered Institute of Marketing’s Construction Industry Group and Construction News. It has been running since 2008 and is completed by senior directors and managers working for companies across the construction industry supply chain.
The sales comparison index, which shows the average % change in sales in the past six months compared to the same period the previous year, improved in April 2017 after reaching a low in October 2016. Sales performance was good over the past six months, with 75% of companies improving their sales compared to the same period last year. The sales outlook index for the next six months also increased, with 56% of companies confident about their sales performance over the next six months.
The new build market continues to lead growth in the construction industry with the housing sector particularly upbeat. The overall expectation of market performance has improved since the last survey. The outlook for Repair and Maintenance is unchanged since the last survey but still positive.
London is the only region where market performance expectation has declined since the last survey but the outlook is still positive. The outlook for all other regions has improved.
Marketing Focus and Strategic Outlook: The marketing outlook over the next 12 months has seen a slight fall compared to October 2016: 43% of companies are set to grow their marketing spend, while only 14% are expecting a decline. However, average increase in marketing spend over the next 12 months has dropped to 0.3%. Expectations for marketing headcount remain positive with 20% expecting to see an increase, although this is a reduction on figures seen in the past 5 surveys.
Brexit has continued to have an impact on many companies, particularly on materials costs due to exchange rates and also on labour availability. It is causing some uncertainty in the market.
When asked which barriers would prevent them from winning work over the next 12 months, 69% of companies said it would be due to ‘aggressive pricing from competitors’ while 40% said it would be ‘a lack of resources to meet demand’.
Sales Comparison for Past Six Months: The average sales increase in the past 6 months was 4.3%, an improvement on the low result seen in October 2016 and getting back to levels seen in 2014 to early 2016.
Sales Outlook for Next Six Months: The index has improved from the decline seen in October 2016 and has returned to the level seen a year ago.
Marketing Spend Outlook for Next 12 Months: The average % change in marketing spend has declined since October and while it remains positive, it is at the lowest level seen since 2012.
This is a summary of the Construction Industry Barometer which covers a range of topics on the prospects of the construction industry and, in particular, on future plans for marketing activities, budgets and headcount. If you would like to receive a full copy of the survey findings, or want to take part in the next survey, then please contact Mel Budd at Leading Edge: mel.budd@lead-edge.co.uk. T: 01252 279990.
A new post by Joe Simpson, Diary of a Tile Addict, May 2017.