Payment delays take over the headlines this month, but it’s not all doom and gloom as UK volumetric market increases and drones are to save the industry £3.5bn. Read on for the latest highlights and news from the UK construction industry.
Government issues recommendations to speed up house-building
Following government-led investigation into the slow rate of house-building, it was revealed that developers are deliberately limiting the number of new built homes that are released for sale at any time to prevent the phenomenon called the ‘absorption rate’, where a glut of new houses drive down prices. Together with a shortage of British bricklayers, the findings will have a significant impact on government plans to boost the number of new homes from 220,000 a year to 300,000.
To overcome the issues, it has been suggested to increase the choice of design, size and tenure of new homes as well as developing a five-year programme of on-the-job training for bricklayers.
Payment delays on the rise
Funding Options, a business finance website, revealed, in 2017/18 it took an average 42.2 days for invoices to get paid in the construction industry. This contributes to a high level of insolvencies, rising by 8% in the last year. The news highlights the need for construction software to help businesses accurately monitor committed, accrued and actual costs against budgets to identify possible slip-ups and ultimately improve cash flow.
Public procurement reform to prevent late payments
The Federation of Small Businesses revealed that 25% of business who are in the supply chains for public infrastructure projects experience late payments. This can be overcome by better use of Dynamic Purchasing Systems and to make sure large government suppliers pay on time.
UK volumetric construction market increases by 6% in 2017
Following the dip because of the Brexit vote, the UK market for prefabricated volumetric modular buildings and portable accommodation has increased by 6% in 2017. This comes because of increased demand for temporary site accommodation on major infrastructure projects e.g. the Crossrail and Thameslink railway construction programmes since 2013. The rise is likely to be sustained through to 2022 and beyond through the implementation of the government’s Roads Investment Strategy and the continuation of the Smart Motorways programme.
Drones to save UK construction £3.5bn by 2030
According to PwC, drone technology can boost planning efficiency and productivity for construction businesses by creating highly accurate visual representations of project sites, 400 times faster than manual methods. Providing the adoption of drones continues to increase, construction businesses can see an increase of 3.1% in productivity, speeding up the process of site surveying.