Download - The U.K. Construction Industry AN OVERVIEW
The U.K. Construction Industry
AN OVERVIEW
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Industry and its structure
Some of the problems and how they are being addressedThe economic contextSolutions ??Problems solved
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
The Construction Industry UKSize
Approx. £ 113 billion pa. (8% UK GDP)Approx 25% public sector investment
Public sectorHighways, utilities, education, health, housing
Private sectorHousing, Offices, Industrial, retail
Private sector “provision”- public serviceHousing (RSL), Education, health, infrastructure (PPP)
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Construction 2010
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Current position 2010
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Political influence ?
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Spending trends
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
• The UK’s four main ambitions are to:
• create the most competitive tax system in the G20;
• make the UK the best place in Europe to start, finance and grow a business;
• encourage investment and exports as a route to a more balanced economy; and
• create a more educated workforce that is the most flexible in Europe.
• As set out in ‘The Plan for Growth’ published alongside the Budget 2011
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Headline Forecasts % change year on year, unless otherwise stated
Outturn Forecast
2009 2010 2011 2012 2013 2014 2015
UK GDP -4.9 1.3 1.7 2.5 2.9 2.9 2.8
Euro Area GDP -4.0 1.7 1.4 1.8 1.8 1.9 1.9
World GDP -0.7 5 4.2 4.3 4.3 4.4 4.4
PSc net borrowing 11.1 9.9 7.9 6.2 4.1 2.5 1.5
CPI 2.2 3.3 4.2 2.5 2.0 2.0 2.0
RPI -0.5 4.6 5.1 3.6 3.5 3.6 3.8
Unemployment (m) 1.53 1.5 1.54 1.53 1.43 1.31 1.18
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
% change year on year, unless otherwise stated
Outturn Forecast
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16
Consumer spending -1.9 5.1 5.2 4.2 4.6 4.6 4.6
Res property prices -2.9 5.5 -2.9 1.2 3.9 4.3 4.3
Res property transactions 14.2 -1.9 -1.0 20.2 20.4 1-.5 5.2
Comm property prices 5.9 4.7 2.1 3.9 5.6 5.2 4.2
Com property trans -17.5 11 4.5 3.1 5.1 5.3 5.2
Market interest rates 0.8 0.7 1.6 2.7 3.4 4 4.4
Euro/Sterling exc rate 1.13 1.18 1.16 1.16 1.16 1.16 1.15
Pubsec exp £ billion 600.9 632.8 656.7 669.6 682.4 694.6 713.4
Pubsec cap inv £ billion 68.9 61.6 53.7 50.7 47.7 49.1 50.4
Total Pubsec exp £ billion 669.7 694.4 710.4 720.2 730.1 743.6 763.8
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
What is the short-term future for Construction
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Industry structure• Categorised by small organisations employing up to
10 employees
• Typically trade based
• Is the industry concentrated?
– 100 largest firms same value of work as 137,000 smallest firms
– Top 42 firms responsible for 13% of output
– Possibly an argument that the industry is becoming more concentrated- main difficulty is measurement
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
SIC Categories
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
SIC Category F- Construction
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Number of firms
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Rise of the subcontractor• Traditionally (50 yrs ago) high % employed craftsmen• Now >80% work subcontracted to specialists• Specialists range from high-tech Mechanical and
Electrical to low-tech labour only bricklayers• Result
–Increase in transactions in industry
–Increase in fragmentation
–Disbursement of expertise
• Problems- need for committees and reports
Financial Management in Construction Contracting
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Trades and employees
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Problems and Reports
• Problems–Late and low-quality projects–Lack of skilled labour–Poor prediction of budgets–Cost overruns–Disputes–Communication…..
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Reports
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Egan outcomes
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
How have we done?Met targets ??
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.
Economic and Business Blockers…
© 2013 Andrew Ross and Peter Williams. Published 2013 by John Wiley & Sons, Ltd.