Those of you in boardrooms of building material and construction firms will agree that the news filtering through from various press agencies can be contradictory, portraying an often gloomy picture of the industry. So I made it my mission when visiting the UK Construction Week show last week to seek out the positives whilst questioning those in the know and selling their wares. Other than a couple of people (unsurprisingly attached to stands that had little activity around them), the mood was buoyant in relation to the immediate and medium term future of our industry. Although more pragmatic than pre-2009, individuals seem excited about the future of their companies and where their careers will take them.
I’ve named no names but here are a selection of the positive conversations I had whilst at the NEC:
• A National Sales Manager at a precast concrete manufacturer with seven plants throughout the UK talked about their factory working at almost full capacity and this was echoed by many larger building products manufacturers I spoke to.
• Commercial and industrial markets are, in the main, holding firm against uncertainty and references to Brexit, impending US elections and the like. Projects within schools (although now out of season), hospitals and business / retail parks are busy.
• Manufacturers are focusing more on niche, highly specifiable products. Commodity driven materials are generally being left to the bigger, more established players in the market. Speaking with the Sales Director of a central European manufacturer of high-end cladding systems, I learned that the quality and individualism of their product is generating increased interest within the specification field. Importantly, even though perceived as a high priced option (they trade in euros), they are finding their specifications are sticking as the project moves down the supply chain.
• Although UK manufacturers who rely on central European suppliers are paying more for services and products, this is more than offset when exporting to foreign shores. Amongst others, a Managing Director of a timber treatment company highlighted this point, stating that they have never had as much business from Scandinavian countries and to date have not had to put up prices to offset supplier hikes.
• Much has been written about manufacturers taking advantage of the weakened pound against the euro when exporting. So it was nice, on two occasions, to hear manufacturers based primarily in Northern Ireland saying that they have recently opened up trading agreements into the Republic of Ireland in response to the current climate.
• Far Eastern investment also continues to rise due to the affordability of attaining land in the UK. Interestingly these developers are less precious about margin controls and are often looking to trump competitors from similar countries. This in itself is allowing UK manufacturers to drive innovation and offer a better level of service.
• Larger manufacturers are investing in new product lines to complement portfolios. Amongst others, a Technical Director of a large timber / joinery manufacture highlighted this. Although stung badly by the recession, the company is now investing heavily in new production lines and educating staff in NPD projects. Much emphasis is being put on educating architects about new, sleeker, innovative, cost and carbon efficient products. Clearly, unique and unbreakable specifications are king to both growing SME’s and large corporates alike.
• I spoke with a Technical Product Manager of one of the world leaders in cement manufacturing who said that the firm is pouring investment into diversifying markets. The company has for many decades held the cards with civil related projects. Interestingly, and unique to the UK operating company, more is now being done to research applications for the commercial world.
Having worked in the sector before, during and post-recession, it was a pleasant and refreshing surprise it was to hear all of the above. Odd looks aside, it was great to leave the show whistling and skipping my way back to my train home. To my mind, you cannot beat interviewing Technical and Operation Directors. Not only do they offer trends into the market but their day-to-day activity is really interesting to listen to. On a selfish level, I hope all the above translates into more and more manufacturers looking for leaders in these areas both now and for the future.
For more insights from UK construction week take a look at my blog Insights you may have missed from UK construction week.