Spring is in the air

House building target of 1.5 million new homes, achievable?

The Government has committed itself to deliver 1.5 million homes which is most definitely a stretch target. The last time 300,000 new homes were built in a year was back in 1969 at a time when social housing was a key part of delivery. The mood music is positive, and the Planning and Infrastructure Bill will help speed up the planning process – the single biggest barrier for new housing. That said we will need an extra 250,000 construction workers to meet the target. The challenge will be to ensure that small and micro housebuilders get the opportunity to build. Over the last forty years the percentage of new homes built by SME developers has fallen from 40% to 10%. Now is the Government’s opportunity to step up and create a more diversified housing market. Building materials businesses are being asked by Government if they’re ready to meet demand – the response by John Newcomb at the BMF’s recent parliamentary reception is that there is ‘£862million planned investment to modernise and increase capacity and capability in the medium-to long-term is being made by BMF members’. We’re seeing big investment in new state of the art merchant branches and more sustainable factories and solutions by manufacturers, all critical to strengthening supply capacity.

Compliance and competency needs upweighting

The Building Safety Act is changing the competence landscape for everyone working in the construction industry including small builders. This presents its challenges and opportunities, but the fact remains that anyone can still call themselves a builder and work in our industry. That can’t be right! One of the 58 recommendations in the Grenfell Inquiry report is the call for licensing of principal contractors. The Federation of Master Builders (FMB) has been calling for the licensing of construction companies for many years. Against this background the FMB is supporting a Private Member’s Bill from the Conservative MP Mark Garnier calling for the licensing of domestic building companies. It will be interesting to see the Government’s response given it has publicly stated it will implement all 58 recommendations of the report.

AI: disrupter or enabler?

Innovation in supply chain, building and construction tech isn’t just on the way, it’s arrived. AI will disrupt the market in ways that will be far reaching; from BIM to project management optimisation, workplace safety management, cost reduction modelling, carbon reduction assessment and more. AI driven solutions will be at the heart of digital transformation in a sector that ranks last but one to agriculture in this area, that’s got to be good news.

Skills shortage is a threat to growth, but is it being addressed?

This is a particular passion of mine as CMDi are the BMF’s partners for their innovative bmcareers.com programme. The problem is a shared one, right across the supply chain. Action is required now and upping everyone’s talent, ESG, EDI, apprenticeships and HR infrastructure programmes is the name of the game. The question is, how ready is your employer brand and talent programme? Shifting such engrained negative perceptions of working in the sector has to be a shared responsibility.

Sustainability, from pain point to gain point

The supply chain is still grappling with this huge and complex challenge, but the market is now evolving quickly. Most of the larger players in Building Materials see it as strategic priority and have a keen eye on ESG. It’s the SMEs that are understandably still grappling with the why, where and how, viewing sustainability as a risk and compliance issue, rather than as a source of value creation. Carbon reporting on products is rapidly growing in demand by customers of large projects and manufacturers are now getting behind EPDs as the best way forward. If you’re not seeing sustainability as a gain point we’d encourage you to change your mindset – sustainability doesn’t always mean it costs more, it can also represent improved selling opportunities.

Build to Rent (BTR) market is on the rise

This is an exciting and emerging market that offers huge potential for growth (projected value £70bn in next 5 years), but needs governance to ensure it is delivered responsibly. Building Materials and construction businesses need to strategically position themselves to leverage this opportunity, but be prepared to invest in robust competencies and firm up on standards and compliance – which is a good thing right?!

In summary, the key to leveraging the many opportunities that are springing up right now is to horizon scan, strategically prioritise those enablers that are growth drivers for your brand, work closely with great Trade Associations like the FMB and BMF who are driving sector collaboration and adapt fast, which is not something this sector is famous for – yet.