Slowdown continues into February

Construction activity has declined for first time in 11 months, according to the latest IHS Markit/CIPS UK figures.

Respondents to the PMI survey have indicated that Brexit hesitation is affecting markets, with business activity levels dropping below 50.0 no change marker for the first time since September 2017 – barring a brief dip for the ‘Beast from the East’ last March.

February’s figures ended a ten-month period of sustained expansion, with the drop in construction work led by reductions in commercial building and civil engineering activity. Combined with a lack of new orders so far in 2019, job creation has also remained subdued in February.

Survey respondents cited concerns about a lack of new projects to replace completed contracts.

Housing has kept its crown as the top performer, with growth recorded for the thirteenth month running. However, the rate of expansion was only modest and therefore could not offset the declines recorded for commercial and civil engineering activity. In both cases, the pace of contraction was the steepest since March 2018.

Comments from survey respondents suggest that Brexit uncertainty had slowed decision-making on commercial projects and led to subdued client demand so far this year. There were also reports that low transaction volumes and a general drop in confidence across the housing market had acted as a brake on residential building.

February data signalled only a marginal overall rise in new work received by construction firms, with the latest index reading the weakest since May 2018. Political uncertainty was widely cited as a factor contributing to a lack of invitations to tender, particularly on commercial projects.

Business confidence hit a four-month low, ranking well below the long-run survey average. Construction firms noted that delays to client decision-making had slowed progress of new project starts, which could create gaps in their future workloads.

Some firms noted that stockpiling by UK manufacturers had resulted in shortages of transport availability and led to longer wait-times for construction products and materials.

Tim Moore, Economics Associate Director at IHS Markit, which compiles the survey: “The UK construction sector moved into decline during February as Brexit anxiety intensified and clients opted to delay decision-making on building projects. Risk aversion in the commercial sub-category has exerted a downward influence on workloads throughout the year so far. This reflects softer business spending on fixed assets such as industrial units, offices and retail space. The fall in commercial work therefore hints at a further slide in domestic business investment during the first quarter, continuing the declines seen in 2018.

“There were also reports that the more fragile housing market confidence has begun to act as a brake on residential work, which adds to signs that house building has lost momentum since the end of last year. This leaves the construction sector increasingly reliant on large-scale infrastructure projects for growth over the year ahead.

“Construction companies pared back their purchasing activity in response to subdued demand in February, but delivery delays for inputs were among the highest seen over the past four years. Survey respondents noted that stockpiling efforts by the UK manufacturing sector had an adverse impact on transport availability and supplier capacity across the construction supply chain.

“On a more positive note, input price inflation held close to January’s two-and-a-half year low. The slowdown in cost pressures from the peaks seen in the first half of 2018 provides a signal that the worst phase has passed for supplier price hikes related to sterling depreciation.”

Duncan Brock, Group Director at the Chartered Institute of Procurement & Supply, said: “In short, the foundations of the construction sector are crumbling under the weight of Brexit and businesses are switching to survival mode until the way forward is cleared.”

If you would like to read more articles like this then please click here.

The post Slowdown continues into February appeared first on UK Construction Online.

Wales to receive £35M fund for new homes

The Minister for Housing and Local Government announced a £35M fund to build innovative new homes in Wales.

Minister Julie James visited Swansea Council’s Colliers Way development to announce the funding which will create energy efficient affordable new homes. The funding comes from the Innovative Housing Project which encourages modern cost-effective homes.

The new homes – built to Passivhaus standards – will feature battery technology, solar panels, air source heat pumps, and modern insulation. It is hoped they will have lower fuel costs and be more environmentally friendly than traditional homes.

Cllr Andrea Lewis, Cabinet Member for Homes & Energy at Swansea Council, said:  “The availability of the funding through the Innovative Housing Programme has enabled Swansea Council to develop modern high-quality accommodation for our tenants in the city.”

“We have recently approved further plans to create even more housing in the city with a number of schemes that will be developed as ‘homes as power stations’ – this has given us the opportunity to explore ways of using available modern technology that will enable each home to generate its own energy.”

Julie James has said that social housing providers can apply for a share of the £35M funding and highlighted the need for new residential building projects to actively tackle climate change. Affordable housing is also a big priority for the government, innovative renewable energy in homes reduces bills and helps tackle fuel poverty.

Current projects include ‘active homes’ being constructed in Neath by Pobl group and Tŷ Solar building in Pembrokeshire and Carmarthenshire. Tŷ Solar is building homes using locally sourced timber and powered by solar panels.

If you would like to read more articles like this then please click here.

If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019.

The post Wales to receive £35M fund for new homes appeared first on UK Construction Online.

Flood and coastal risk plans released by Environment Agency

The Environment Agency has published new evidence which will help it plan for flood and coastal risk up to 2065.

The new study uses climate change, population and mapping data to set out future flood risk scenarios and an economic assessment to aid planning flooding and coastal management resources for the next 50 years.

Some £2.6Bn is being invested by the Environment Agency in flood and coastal erosion risk management projects between 2015 and 2021, helping to protect 300,000 homes; for example, the £10M Salford flood storage basin, opened in 2018, protects 2,000 homes and businesses.

The report expects that, without sustained investment, future flood damage to properties and infrastructure in England will significantly increase, estimating an average annual investment of £1Bn will be necessary up to 2065.

A full range of climate change scenarios demonstrate that a number of measures are needed to ensure that communities are resilient over the next half-century. These include building and maintaining large-scale engineered defences, natural flood management techniques such as planting trees and slowing the flow of water and property flood resilience for homes.

The findings will also provide new evidence for planning authorities and developers. As the population grows, the number of properties in the flood plain is set to almost double over the next 50 years. Current planning policy and implementation limits the impact on flood risk but continuing to make the right investment and planning decisions will be vital to keep pace with population growth and climate change.

Julie Foley, Director Flood Strategy at the Environment Agency said: “This report sets out the level of investment we need to consider over the next 50 years alongside the action we need to take to ensure that communities, businesses and vital infrastructure are resilient to flooding and coastal erosion.

“The scenarios are a key evidence base to inform our Flood and Coastal Erosion Risk Management Strategy, due later this year, and will help government, businesses and the insurance industry plan for the future.”

The report findings highlight the importance of continued investment to protect infrastructure including transport and utility networks, 41% of which are located in areas which are at risk of flooding.

Later this year, the EA will consult on its new Flood and Coastal Erosion Risk Management Strategy which sets out the long term vision for a nation more resilient to flooding and coastal change.

If you would like to read more articles like this then please click here.

If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019.  

The post Flood and coastal risk plans released by Environment Agency appeared first on UK Construction Online.

Plan to modernise defence estate released

The Ministry of Defence has promised to invest £1.5Bn into modernising the UK’s defence estate.

A plan for 33 defence estate sites across the UK has been released by the Defence Secretary. The sites will be subject to upgrade, closure, or repurposing. with a few original buildings being retained.

Bases including RM Chivenor, Norton Manor Camp, Rock Barracks, Molesworth, and Condor Airfield will be kept while some others are being shut down and the land released to local authorities. Over 40% of military sites in the UK are over 50 years old, highlighting the need for modernisation.

Defence Infrastructure Optimisation (DIO) Chief Executive Graham Dalton said: “Delivering the Defence Estate Optimisation Programme to create a smaller, more modern and capability-focused estate is a priority for the MOD and DIO. We are set to invest £1.5Bn into the defence estate over the next five years to meet military requirements.”

“This is an exciting opportunity for Defence and we continue to engage with all relevant stakeholders, including Devolved Administrations both in areas where sites are closing but also towns that will welcome new enhanced garrisons and camps.”

The DIO is will consult with local authorities to ascertain the best use of former military sites. Land released by the MOD can be used by local authorities for residential or commercial building work according to the local area’s needs.

Defence estate currently takes up around 1.8% of land in the UK, which the MOD says is not relevant to the modern military’s needs. The plan is to create smaller, more streamlined sites which represent better value for money.

The MOD will invest the £1.5Bn over five years with an aim to meet modern military requirements. In 2016 a £4Bn fund was set for the Better Defence Estates Programme which aims to reduce defence estate by 30% while ensuring accommodation and training needs are met.

If you would like to read more articles like this then please click here.

If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019.

The post Plan to modernise defence estate released appeared first on UK Construction Online.

From CIS to making tax digital for VAT: Construction made simple

Despite uncertainty shrouding Brexit, the construction industry enjoyed a strong end to 2018. According to the Institution of Procurement and Supply who measure industry performance, UK construction output reached a four-month high in November – racking up an impressive 53.4  points, up from 53.2 in October.

But while confidence amongst the sector may be rising, it’s not all plain sailing. This year, a large number of business owners will have to understand new legislation whilst also managing existing regulations, impacting on their financial management, says Damon Anderson, Director of Partner, Xero. But the good news is, if you’re prepared, rules and regulations can be a help rather than a hindrance.

The Construction Industry Scheme (CIS) is not new news to those in the industry – but it can be time-consuming, and it’s easy to make costly mistakes if implemented incorrectly.

Launched in 2014, CIS requires construction hirers to deduct income tax directly from a worker’s gross earnings to ensure the self-employed pay the correct tax.Knowing that millions of contractors, sub-contractors and sole traders need to comply with the special tax rules and regulations, at Xero we pledged to help contractors, subcontractors and accountants involved in managing CIS. Our cloud accounting software does the hard work and enables deductions to be automatically calculated from subcontractor invoices and bills, and soon direct CIS filings from Xero Construction businesses will be able to make CIS returns directly from Xero. This is currently in Open Beta. Available for free in open beta now, it will soon be available as an add on, which will make filing CIS returns easier for thousands of construction businesses in the UK, reducing errors and time on administration.

But CIS is not the only legislation impacting the construction industry. Next year, Making Tax Digital for VAT will launch in April 2019, whereby every VAT-registered business above the £85,000 threshold will be required by law to file their tax returns through HMRC cloud-compatible software. Currently up to five-million small businesses file their tax using spreadsheets and paper to file their taxes. In fact, our own research has found one in five paper accountants and still use paper ledgers, so Making Tax Digital will be a big change for any companies tax’ processes, bringing them in the the modern, digital age. MTD for VAT is designed to remedy costly mistakes, make tax filing easier and more accountable right down to individual invoices. As an HMRC technology partner for Making Tax Digital for VAT our task is to help businesses make the digital switch easier. Just as we are doing with CIS, you will be able to seamlessly file your tax through the Xero platform direct to HMRC.

Yet challenges remain. With just weeks to go before the biggest tax filing shake up for decades, thousands of businesses aren’t ready. We found that one in five small business owners aren’t aware of the new Making Tax Digital legislation, and just 23% of small business owners know MTD will eventually be compulsory for all businesses. And it’s not just small business owners caught unprepared – of the 200 accountants and bookkeepers we surveyed, almost half were unaware of the penalties associated with non-compliance.

Clearly, new tax regimes need to be simplified, and change is daunting. So, as part of our efforts to make the digital switch-over easier, we’ve created Dexter an animated tax advisor who explains how to get Making Tax Digital for VAT compliant. Created by the Oscar-nominated duo Alison Snowden and David Fine, Dexter explains the steps businesses need to take go digital. The sooner Dexter’s message is acted on the better, because almost a third of accountants we surveyed said they expect digital tax to increase their firm’s productivity, and 51% said online software is already improving collaboration with clients.

Adopting new processes and technology is challenging but any online platform must make things easier, and accounting technology is all about streamlining admin, saving you valuable time and money, and enabling you to get stuck in to the work that literally stands the test of time.

If you would like to read more articles like this then please click here.

The post From CIS to making tax digital for VAT: Construction made simple appeared first on UK Construction Online.

Businesses and the unemployed supported in skills training by HS2

New figures show that HS2 has supported hundreds of unemployed people into skills training and thousands of businesses have already won contracts.

HS2 Ltd’s skills training and education efforts appear to be successful, with new figures showing a commitment to providing opportunities and skills development. Through HS2 2,000 businesses have won work and 259 unemployed people have entered into training and work.

The HS2 Skills, Education, and Employment strategy was launched last year with the training of unemployed people laid out as one of their commitments. The size of the project means there are positions ranging from archaeology and ground preparation to civil engineering and ecology.

HS2 Ltd’s Head of Skills, Education, and Employment Kate Myers said: “HS2’s legacy will extend far beyond the revolutionary rail network it creates, thanks to the skills, employment and education opportunities it is opening up for people right across the country.”

“HS2 is much more than just a railway and we are committed to ensuring that the 30,000 people we’ll need to design and build it represent a diverse, talented and highly skilled workforce.”

HS2s main partner Balfour Beatty has provided a number of apprenticeships to people entering the industry for the first time. There is a particular emphasis on providing opportunities for women and BAME workers.

So far most benefits have been seen in Birmingham and the Midlands where the majority of preparation work is being conducted. Contractor LM-JV has committed to keeping skills in the area, targeting local recent graduates and those who have struggled to find work.

If you would like to read more articles like this then please click here.

If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019.

The post Businesses and the unemployed supported in skills training by HS2 appeared first on UK Construction Online.

Cash boost for new homes at Festival Gardens

Some £9.9M in funding from Homes England will see 1,500 new homes built in Liverpool’s Festival Gardens.

Homes England has announced a nearly £10M fund to build new homes in Liverpool’s iconic Festival Gardens from the government’s £450M Local Authority Accelerated Construction (LAAC) scheme. Liverpool City Council will use the funding to complete remediation work on the site to allow construction to begin.

Mayor of Liverpool Joe Anderson said: “We welcome this essential financial injection from Homes England. Festival Gardens is a much-loved waterfront location and people have very fond memories of spending time there.”

“Thanks to this funding, the council can start essential remediation works on site and move forward with the vision of creating a significant number of new family homes in South Liverpool at an iconic destination.”

“Alongside this, we are testing feasibility for a leisure element on site – Festival Gardens will not only deliver a much sought-after housing development, but also a first-class visitor and cultural destination.”

Residential building has been planned for the central city location before but a lack of funding has meant the council has been unable to go ahead with preparation on the site. It is now hoped that the first new homes will be available by 2022 with work starting this year.

Festival Gardens has become an iconic spot in Liverpool thanks to its history. The site has been in disrepair since it was originally used for the Gardens Festival and occupies a central waterfront location.

Homes England also recently opened offices in the same building as Liverpool City Region Combined Authority. They hope that relocating their offices will allow the two organisations to work in collaboration.

If you would like to read more articles like this then please click here.

If you are interested in finding out more about key infrastructure trends today, you may wish to attend the flagship infrastructure exhibition at the NEC in April 2019: UKIS 2019

Register for your delegate place now: UK Infrastructure Show 2019.

The post Cash boost for new homes at Festival Gardens appeared first on UK Construction Online.