Shortly before Christmas the Chancellor announced the birth of a new baby for construction. It had been two years in themaking and after a number of false starts, the government finally revealed the new version of PFI and named it PF2.
Will PF2 be the messiah for specialist finishing contractors? In the short term highly unlikely. The lead time for work to feed into tier two and three contractors is too far down the line to make any short term impact. So is it going to be business as usual and more of the same for the sector as we start a new year?
Even the Chancellor now accepts that nothing is going to get any better unless he puts some money behind the rhetoric. If you are a business that is involved in anything more immediate or short term, like housing or general building, then I’m sorry but it seems 2013 could be the same as 2012.
We will see the introduction of the much maligned Green Deal which, if it can be made to work and work well, offers invaluable sources of work; albeit in a different format. On the downside Green Deal could be a threat to existing businesses in the sector as other skilled trades morph into work that specialists would normally carry out in insulation and rendering.
At the moment wherever you operate it’s all down to cost. But despite cost pressures there is no lack of innovation; it’s the lack of uptake of new products that’s the problem. The sector is as innovative as ever, but everyone is struggling to bring costs down. Clients simply aren’t buying in volume any more.
Ultimately we need greater demand for larger volumes in the marketplace. This will create the need to build more quickly and take some of the emphasis away from cost, giving contractors the confidence to invest in their resources and manufacturers the impetus to invest more in new products.
The challenge for the government is to get money hitting the ground in shovel ready work in the next couple of months. The move of £5bn in to capital spending in areas such as education and hospitals has to be applauded.
If that can be achieved, meaning the money can fill more of the current gap in workloads while the new PF2 and Green Deal bed in, then many firms in our sector would be able to approach 2013 with more confidence. And that, in a market worn down by tough times and uncertainty, would be a welcome New Year cheer.
