Lendlease, has agreed to partner with the World Green Building Council (WorldGBC) on its Advancing Net Zero climate action programme. Lendlease has signed up to support the programme’s goal of decarbonising the sector by 2050. An aim that requires an unprecedented transformation in the way that buildings are designed, built, operated and deconstructed.
Over the next forty years, the world’s building stock is expected to double. Advancing Net Zero aims to support work that will mean new buildings achieve the highest performance standards in sustainability, and where existing buildings are retrofitted to net zero standards.
The building and construction sector is a major contributor to global energy use, carbon emissions and resource consumption. As a result, it has an enormous and untapped potential to contribute to the fight against climate change and promote economic recovery.
By partnering with Advancing Net Zero, Lendlease is helping promote and increase the industry’s role in tackling the climate emergency in two ways — by extending collective impact beyond operational carbon into embodied carbon, and outlining the actions and policies needed to create systemic change.
Cate Harris, Group Head of Sustainability at Lendlease, said:“We have set ambitious and industry-leading emissions targets to achieve net zero carbon scopes 1 and 2 by 2025 and absolute zero carbon scopes 1, 2 and 3 by 2040 and so we welcome the opportunity to also pledge our support to the World Green Building Council’s Advancing Net Zero climate action programme, to help bring others in our sector on this journey.
Construction and infrastructure workloads sprang back into life at the start of 2021, as the UK sets about building back better, according to the RICS UK Construction and Infrastructure Monitor for Q1 2021. The solid recovery was led by private residential with the increase in new business enquiries continuing and for the third consecutive report respondents reported a rise in new hires.
Respondents to the latest RICS survey reported the highest reading (net balance) for workloads since the early part of 2016, with +26% more respondents reporting a rise in workloads at the all sector level; (+2% Q4 2020).
Driving the increase in workloads is the private residential sector where +39% more respondents reported a rise in workloads over the first three months of 2021. Infrastructure workloads also picked up further with +34% of respondents reporting a rise. Social housing and public works also increased over the quarter, as did private industrial and commercial but to a lesser extent.
As the UK COVID restrictions gradually lift, and workloads are increasing, respondents are also reporting an increase in new business enquiries and for the third consecutive report respondents have reported a rise in new hires.
More than 44% of respondents expected workloads to rise during the coming twelve months and more firms are expected to increase employment (+37% up from +17% in Q4 2020). The greater level of confidence is also reflected in profit margins which returned to positive territory for the first time in over two years (Q4 2019).
When looking at the challenges that could impact how quickly the UK can build back better, the majority of respondents (57%) reported a shortage of materials being their main impediment. Financial constraints and a shortage of labour also continue to be issues that are holding back projects, however, financial constraints have lessened since this time last year, when 70% of respondents reported it as their biggest challenge, compared to 45% in this report.
The RICS report found that project cancellation as a result of the pandemic indicated that between 3 and 4% of residential projects have been permanently cancelled rising to 6% when looking at non-residential.
Simon Rubinsohn, RICS Chief Economist said: “The rebound in workloads over the past quarter allied to the positive expectations for the next twelve months paints a positive picture regarding a broader recovery in the economy. But what is particularly encouraging is the suggestion not just the construction and infrastructure sector will start hiring once again but also that the compression in profit margins may just be beginning to turn around.
“While it will take more than one quarter to signal the emergence of a sustainable trend in profitability, the indications are that the industry has adjusted relatively well to Covid related work practices with most respondents to the survey suggesting only a small hit to productivity. Alongside this, the fact that over 80% of respondents are not seeing evidence of tenders coming in below bids is another positive signal regarding how the sector has weathered this storm.”
New research from cost consultants Gleeds has revealed growing optimism from the industry post-Covid as nearly two thirds of contractors questioned report an increase in tender opportunities over the past quarter, and over 70% expect this trend to continue into the next. This marks a shift from Q1, when less than a quarter of contractors quizzed claimed to be anticipating an uptick. However there are warnings about increasing tender prices and potential skills shortages.
As a result of increased confidence in the market and an influx of projects being tendered, 88 percent of respondents expect tender prices to increase. Pressure on materials was also thought to play a key role in pushing prices up, with 80% of contractors reporting that they had experienced issues with the supply of materials in the early part of the year. Many of those asked believed this was down to a combination of factors, however the global pandemic and the impact of Brexit were cited as the biggest influences.
Graham Harle, chief executive at Gleeds, said: “With a vaccine roll-out happening at pace and increased opportunities coming forward, there is definitely a sense of the construction industry lifting. The publication of the government’s ‘build back better’ plan for growth outlined capital spending plans worth £100 billion, aiming to create new jobs, improve productivity and support the levelling up agenda — demonstrating that construction is at the heart of the UK’s economic recovery. Whilst the outlook for construction is definitely more positive, challenges remain. The effects of the pandemic are still being felt, particularly regarding materials, and there are still concerns that labour shortages may be felt later in the year as workload increases.”
While continued materials challenges topped the list in terms of threats to the recovery of the industry going forward, the survey revealed that further waves of Covid-19 were the second largest concern for construction professionals. The ramifications of the past year’s restrictions are likely to be long-lasting, with over half of respondents preparing for an increase in contractual disputes as a result of fluctuating timelines for project completion in the wake of the pandemic.
When asked about life after Covid, 75% said they expect to see an increase in home working, with 69% also anticipating a rise in flexible work patterns and reduced need for ‘in-person’ meetings going forward. These shifts could change the way in which new buildings are designed, with 55% believing we will see more flexible spaces developed to meet the demand for improved work/life balance. This would certainly appear to be the case, with 81% already finding a greater emphasis being placed on wellness at the design stage of new projects.
The £2.5 million Cat-A fit out and refurbishment of a 25,000 sq ft 11-storey office in Birmingham’s Southside has been completed for Paloma Capital by Willmott Dixon.
Phil Crowther from Willmott Dixon said: “We are very pleased to have completed the Cat-A fit out and refurbishment of the Southside Building. It’s always pleasing to deliver a successful project of this scale but especially so given the challenges presented by maintaining social distancing measures in a fully occupied building.
“The building provides a tremendous opportunity for occupiers seeking smaller or co-working space in an excellent business location, within easy reach of Birmingham’s city core. It’s one of the first offices of its kind to be refurbished in the area and it’s done so at a really exciting time.”
The programme of works has seen improvements made to common areas and vacant office suites which have been comprehensively stripped out and refurbished, to create stylish contemporary spaces. The first floor has been reconfigured, providing several new features including an occupier’s kitchen, break out space, touch down working areas and a boardroom complete with video conferencing facilities. Specially designed Zoom booths, an outdoor terrace and event space have also been included in the new layouts.
The exterior of the building, which is located next door to Birmingham Hippodrome, has been partially reclad, and retail units have received modern new frontages. A ground floor coffee shop provides an internal link to an enhanced and reconfigured design-led reception, whilst tenants will benefit from new bicycle storage with shower and changing facilities.
Willmott Dixon worked alongside consultants from Whitman Wilde, Quantum Consulting and Malcolm Hollis on the project.
For more information about space available at The Southside Building, go to: https://thesouthsidebuilding.co.uk/
In a trading update this morning SIG plc has announced that the group has made an encouraging start to the year. SIG is cautious about macro economic conditions, however, it expects full year revenues to be slightly ahead of prior expectations, and profits also to be higher than previously expected.
UK operations benefiting from the strength in the RMI market. After a solid start in January and February sales volumes then picked up strongly, and March and April traded ahead of management’s expectations.
SIG confirmed there were shortages of materials in certain areas, as reported previously, and that input price inflation remains significant in some categories.
The group said that prior year comparative growth rates from late March are distorted by the impact of Covid, notably in the UK, Ireland and France. Therefore the table below includes comparisons with both 2020 and 2019. Performance for the year to date has been ahead of expectations. Group sales were 29% up on 2020 for the four-month period. They were 4% lower than the same period in 2019, and flat against 2019 in March and April.
The UK Distribution turnaround, focused on delivering distinctive expertise and superior local service, is progressing well and is ahead of plan. Customer numbers are rising and we are regaining market share. The business’s sales were on a declining trend throughout 2019 and most of 2020, and hence the 24% drop versus 2019 shown above.
Daily sales are now showing consistent progress, with the improvement accelerating in March/April, and April sales up approximately a third on the daily averages seen last summer. Based on current momentum, SIG expects the monthly growth figures vs 2019 to turn positive early in the second half.
The UK Exteriors business is also trading well, benefiting from the increased demand, with strong growth versus both 2020 and 2019 comparatives.
The French businesses are continuing to perform strongly, and are also benefiting from strong RMI demand. Germany and Poland are both performing solidly, with good growth in recent weeks. The groups Ireland business was affected by the significant Government restrictions imposed on construction from 1 January 2021, but these are now being eased.
Whilst the evolving Covid-19 backdrop will continue to create uncertainty in the short term, the strong demand across territories and sectors in the first four months of the year was encouraging and gives the Board increased confidence for the full year performance.
SIG was positive about its future and said in this morning’s statement: “The momentum we have seen through March and April, together with improving visibility on the near-term order book, means that we now expect the Group to deliver an underlying operating profit in the first half, returning the Group to profitability earlier than expected.”
Keltbray, one of the leading specialist contractors, has revealed a before tax loss of £9.4m for 2019/2020 due mainly by the costs of Covid-19.
The revenue impact of temporary site closures and delayed projects, and restructuring costs, saw revenue crash 24% to £428.6m (2019: £563m). The groups cash management was more resilient and Keltbray at the year end it had a positive cash position of £25.0m with £20.0m of secured, unused banking facilities.
Keltbray’s forward order book was £224m, however it has warned of a tightening opportunity pipeline.
Keltbray said it continues to invest heavily in sustainable innovation and 100% of its fixed locations now use renewable energy, and it uses Earth Friendly Concrete (EFC) as a standard product as part of its service offering to customers.
Darren James, Group Chief Executive said: “These results cover a period of intensive challenge for Keltbray and the entire industry, none of whom have been immune from the effects. Although we’ve had to handle lockdowns, fundamentally revise working practices, and take tough decisions to safeguard our business and the jobs it provides, I am pleased to report that as a result of our strategic diversification, Keltbray finished the year in a strong cash position and is making good progress in strategy execution.
“Our long-term aim is to become a more sustainably profitable specialist engineering business by investing in our talented workforce, innovative engineering technologies and core self-delivery capabilities. We will target opportunities in sectors that most benefit from the certainty of our innovative approach. This approach is reinforced in our new core purpose – To redefine the way sustainable development is delivered. This, along with our strong governance, bodes well for the future of Keltbray.”
The Construction Leadership Council has expressed concern about material shortages and contract completions could be effected within the next few months unless supplies improve.
A statement from the co-chairs of the Construction Leadership Council’s Product Availability working group, John Newcomb, CEO of the Builders Merchants Federation and Peter Caplehorn, CEO of the Construction Products Association, said that while construction activity continues to be strong across the UK, products are available but lead times have lengthened. Current demand is such that it is proving difficult for manufacturers and suppliers to build up stock levels.
The worst affected product areas continue to be timber, roof tiles and roofing membranes. There is unlikely to be any improvement in timber supplies this year with little or no timber currently coming into the UK that is not already pre-sold and global demand is outstripping supply. However, the supply of roofing products is expected to improve in the second half.
Raw material shortages, stemming from global demand and other external factors such as factory closures outside the UK, continue to constrain production of PE and PP plastics, PIR insulation, paints, adhesives and other coatings, and also packaging for other product groups.
Global demand also continues to impact prices and delivery times on structural steel, internal steel products and galvanised steel. Evidence suggests that some steel products may suffer continued shortages into the second half of the year.
Accurate forecasting can help alleviate availability issues. The CPA’s latest forecast was published this week and the BMF will publish their latest forecasts in May.
Mr Caplehorn told Building magazine that problems will start to delay completions and that shortages could hit major projects within the next few months unless supplies improve.
The CLC’s key advice is to plan in advance, work closely with your supply chain and communicate your requirements early with suppliers, distributors and builders merchants. Collaborative, ongoing communication throughout the whole supply chain is essential.
The Product Availability Group is also exploring further solutions to alleviate other bottle necks in the supply chain such as logistics and transport, including the ability to accept deliveries outside of normal opening hours.
The Spring Forecast from the Construction Products Association is forecasting that construction output is anticipated to rise by 12.9% in 2021 driven by growth in infrastructure, public housing repair, maintenance and improvement and industrial. However, there are major supply and demand issues which have caused prices to escalate, delivery times lengthen and some key products to go on allocation.
CPA Economics Director Noble Francis, said: “Whilst outlook is largely positive, the recovery in commercial – the third-largest construction sector – is expected to be muted given a lack of major investment in new projects, particularly in Central London. Questions remain over future demand of commercial space, particularly in offices and retail, which may be converted into residential or warehousing and logistics, if home working and online spending persists in the long-term.”
The CPA spring forecasts suggest that it will be next year before the industry recovers the output lost in 2020 and returns to 2019 levels, however. It also highlights significant risks to the construction sector’s recovery from 2021, including supply constraints for key imported construction products and uncertainty around demand for housing new builds, and repair, maintenance and improvements works (rm&i) and commercial space.
Construction output is forecast to rise by 12.9% in 2021 and 5.2% in 2022 compared with 14.0% in 2021 and 4.9% in 2022 in the CPA’s winter main scenario. The downward revision to the growth forecast for 2021 reflects a higher base for construction output in 2020, with official data reporting a smaller fall than initially anticipated of 12.5% in 2020 compared to 2019. The UK economy faltered in 2021 Q1 due to the impacts of the third national lockdown on the services sector that accounts for 81% of UK GDP. For construction, however, activity accelerated in the first quarter of the year, although the story varies amongst its various sectors.
Infrastructure was least affected by the initial lockdown as it was considerably easier to enact site operating procedures and other safety measures on large sites. In 2021, output is set to increase by 29.3%, reaching its highest level on record. This will be driven by activity on major projects such as HS2, despite the announcement of further delays and cost overruns, as well as activity on long-term frameworks in regulated sectors such as water, roads, electricity and broadband.
Extensions to the stamp duty holiday, Help to Buy and job support schemes are expected to help sustain demand in private housing and private housing rm&i. Private housing, which was the worst-affected construction sector in the initial lockdown is expected to continue its strong recovery in 2021 with the Chancellor’s mortgage guarantee scheme likely to enable demand in the general housing market.
In addition, demand for contracted-out improvements projects, outdoor and office-related space requirements at home is likely to be maintained by households with higher incomes and those that have built up savings due to a reduction in commuting and work-related expenses.
Prof Francis concluded: “There are significant risks to the recovery in the form of supply constraints in terms of extended lead times and sharp rises in costs for vital imported products such as paints and varnishes, timber, roofing materials, copper, steel and polymers. This may hinder the ability of construction activity to increase in line with our forecast. Furthermore, concerns remain whether the high levels of demand for housing new build and rm&i can be maintained after the government stimulus and policy measures end on 30 September, particularly the furloughing and self-employment income schemes and stamp duty holiday.”
50 organisations including representatives of the energy and water sectors are backing the Construction Leadership Council’s (CLC) National Retrofit Strategy which sets outa twenty-year blueprint to transform the nation’s housing stock to make it greener andmore energy efficient.
Last week the CLC unveiled CO2nstruct Zero to promote the high-level priorities that the industry must work on to reduce carbon, thereby playing our part in achieving the UK Government’s objective of net-zero for the whole economy by 2050.
CO2nstruct Zero will act as the focal point of engagement for the industry with the Government in preparation for November’s COP26 climate change conference in Glasgow.
The CLC National Retrofit Strategy is structured into four phases and calls on the Government to invest an initial £5.3bn over the next four years to help kickstart the retrofit market. The benefits of this investment would lead an additional 100,000 new jobs; a saving to the NHS of £1.4bn; and a reduction inhouseholders’ energy bills by as much as £436.
Andy Mitchell, Co-Chair of the CLC Task Force, said: “Given our homes contribute 20% of the nation’s carbon emissions it is essential thatwe start to retrofit them to make them more energy efficient. With widespread industry support the CLC is calling on the Government to adopt the National Retrofit Strategy to make our homes greener.”
Brian Berry, Chair of the CLC Domestic RMI Working Group said: “At a time of economic uncertainty and growing pressure to tackle climate change the CLC’s National Retrofit Strategy offer a ready- made solution for the Government to take forward and showcase to the world at COP26 in November.”
To ensure the UK government’s commitment to achieving Net Zero greenhouse gas emissions by 2050 is on track, the construction industry will require the equivalent of 350,000 new roles to be created by 2028.
These will need to be found through a mix of new skilled jobs, increased efficiencies in existing roles, and innovation in how the industry decarbonises the built environment. That’s the key finding of Building Skills for Net Zero, published by the Construction Industry Training Board (CITB).
UK construction contributes approximately 40% of the UK’s emissions according to the UK Green Building Council (UKGBC) and reducing this to Net Zero represents a huge challenge. Yet the move to cleaner, greener construction presents big opportunities to make the industry more attractive to new recruits and upskill the existing workforce.
A critical element of achieving Net Zero will be reducing carbon emissions from existing buildings. Across the UK 80% of buildings in use in 2050 have already been built and these could represent 95% of future built environment emissions. Reducing emissions to Net Zero will require retrofit work on up to 27 million domestic and 2 million non-domestic buildings.
CITB has modelled the skills profile of the workforce needed to deliver Net Zero using data from the Climate Change Committee (CCC). This shows that by 2028, additional decarbonisation work will have created the demand for 86,000 construction project managers, 33,000 building envelope specialists and 59,000 plumbers and HVAC specialists.
This opportunity comes alongside the COVID-19 pandemic and an expected rise in unemployed workers coming from other sectors. This is a perfect time for the construction to position itself as a career destination of choice for people who really want to make a difference.
CITB’s research shows that reducing built environment emissions to Net Zero can be achieved if there is an industry-wide investment in skills, far-reaching skills policy reform and an unprecedented recruitment drive. The challenge is great, but so are the rewards, giving thousands of people new career opportunities as we emerge from a time of national crisis.
Chris Carr, Managing Director of Carr & Carr Builders, and Federation of Master Builders Board Member, said: “The skills challenge around Net Zero is huge and this research shows how it can be tackled. A big part of it will be upskilling the current workforce so that they understand what sustainable building is all about. ”
CITB Strategy and Policy Director Steve Radley said: “Net Zero presents a huge challenge for construction but an even greater opportunity to create a more productive industry that’s also a more attractive career option.”
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