Built environment recession

Citation

Hoxley, M. (2010), "Built environment recession", Structural Survey, Vol. 28 No. 2. https://doi.org/10.1108/ss.2010.11028baa.001

Built environment recession

Article Type: Editorial From: Structural Survey, Volume 28, Issue 2

The start of 2010 has been accompanied by many depressing predictions of what the future holds in store for the UK property and construction industries and professions. Forecasters are less than optimistic about the next few years and the uncertainty leading up to a general election at which a change of government seems likely is not helping. Amongst the predictions of gloom are those from the Federation of Small Businesses (FSB), the Civil Engineering Contractors Association (CECA) and the Construction Products Association (CPA). The FSB report that of 100 construction-based respondents to their survey, one-third are worried about their business prospects and that late payments are stifling their cash flow. The CECA predict that thousands of jobs are at risk as the downturn looks set to worsen. Their survey of members reveals the worst outlook in the 13 years that the CECA have been canvassing the views of their members. Meanwhile the CPA report an estimated 12 per cent fall in construction output in 2009 – the largest fall in a single year since records began in 1955. They predict a further decline of 3 per cent in 2010 with the first tentative signs of recovery in 2011.

The professions are being badly hit with many redundancies and falling salaries. The Institution of Civil Engineers report falls in salaries of their members for the first time in seven years. Graduates from built environment courses have found that there are few jobs for them. Unemployment for 2008’s graduates overall was 7.9 per cent, the worst figure since 1995/1996, and the rate for built environment courses was slightly higher than the general figure. A survey by the Fees Bureau reports falling salaries for architects, quantity surveyors and civil and structural engineers. The RICS Construction Market Survey for the final quarter of 2009 reports falling workloads and negative profit and employment expectations. Although figures from the Office of National Statistics report that construction orders were unchanged in the three months to December 2009 compared to the previous three months, they still confirm a 13 per cent fall over the previous year.

There were some signs of a recovery in the housing market during late 2009 but the bad weather experienced in the UK and uncertainty leading up to the Spring or Summer general election both seem to have had an adverse impact. There have been some increases in prices with London figures being about 15 per cent below the 2007 highs. Optimism is not high however with some commentators predicting more falling values in 2010.

As with the general economy, lack of finance is at the heart of the problem. The Association of Consultancy and Engineering has called for urgent talks with banks about prioritising affordable credit for small businesses. Meanwhile the Forum of Private Business believes that a move away from bank lending is the answer. They are urging the Government to look into creating alternative options for small businesses which have been denied finance by traditional sources of lending.

As the UK emerged from previous recessions it was the property and construction sectors that were the slowest to recover and there is nothing to suggest that the situation will be any different this time around. Skills shortages were then experienced by the professions in these sectors as school leavers had declined to study built environment university courses. In my experience recruitment onto such programmes of study lags behind what is happening in the economy by three to four years. This time the situation may be moderated slightly because of a central cap on university places. Ironically some universities are planning to increase the A level entry points required to study on built environment courses in order to ration places. The HEIs are naturally afraid of over-recruiting as they will have heavy financial penalties imposed upon them if they do so. I still believe that students will opt for courses that seem more recession proof but likely changes in top-up fees may well complicate the issue. I became an academic during the last big recession of the early 1990s when things were very difficult in the industry. My contacts who remain tell me that this time the situation is very much worse. I have great sympathy for those who have lost their jobs or seen their salaries decrease and of course for those graduates who have failed to secure jobs. Let us hope that things are not quite as bad as the prophets of doom are forecasting.

Papers in this issue

In the first of two papers, Alan Forster examines conservation philosophy for masonry repair concentrating on the ethics of the issue. In the second paper (to be published in the next issue) he looks at “principles” and an overarching theme of both papers is the need to think through things very clearly when looking after ancient masonry and not merely to chose the “best value” option. Phil Wadick from Australia investigates the safety culture among subcontractors in the domestic housing construction industry down under. Jim Kempton from Portsmouth University reports his quantitative study of modern methods of construction and RSL asset management. Sommerville, Craig and Hendry from Glasgow Caledonian University take a fresh look at the role of the construction project manager. Their findings are very interesting particularly about how the role changes with the maturity of the person managing the projects. Finally Richardson, Allain and Veuille report their laboratory based findings on the use of crushed, graded and washed recycled construction demolition waste as a coarse aggregate replacement in concrete.

Mike Hoxley