CHALLENGES LIE AHEAD, BUT NEW YEAR OPTIMISM NOT MISPLACED

As 2021 takes its first tentative steps, what fates does it have in store for the UK construction industry? Recticel and Gradient's Commercial Director Paul Simpson offers his view on the potential challenges that lie ahead. When asked to provide a prediction on what the following months might bring for the building sector, I think it's important to be realistic. We remain in the middle of a pandemic that has taken many lives, and may take many more. Therefore, the nation's health and safety should remain the principle consideration before attentions turn to our economic recovery. We've been told the vaccine roll-out is crucial to our escape from the current crisis, and as all seems to be going well on that front, there is real hope on the horizon that this year will be better for all.

However, as the politicians and scientists care to remind us, there is a long way to go before anything like normal Iife returns. And therein lies the problem for the construction industry and business as a whole: none of us knows how long the current lockdown restrictions will last. It means long-term plans, which are crucial to commercial success, remain on hold whilst we await news of the government's exit strategy from lockdown. In the meantime, as we have throughout this health crisis, Recticel and Gradient remain committed to providing customers with the best possible service. This means doing everything we can to ensure our distribution partners have the products they need to maintain the building supply chain and ensure projects are fulfilled.

Supporting the supply chain

The building supply chain's effective operation is essential to keeping the construction industry buoyant, which in turn will be essential to the UK's post-pandemic economy. Any break in the chain will have a negative domino effect, leading to every other link failing to deliver what it promised. I fear this becoming a real issue when the furlough scheme ends, as it may result in the closure of many businesses that relied on its financial support. Ultimately, smaller distributors and subcontractors will be most at risk when the government's support package expires, but each is a vital link in the building supply chain. A shortfall in such resources will inevitably lead to project delays and extra expenditure for supplier and client; a potential burden that is particularly unwelcome at this time of economy uncertainty.

Having said how difficult it is for building companies to plan for the months ahead, I think the issue could be relieved by local authorities, for example, offering those in the supply chain some insight into projects that are on the horizon. Obviously, this will not be easy, as councils and the like are also having to deal with an unprecedented situation. For them, committing to future projects at a time of great financial uncertainty will be a precarious practice. However, any kind of heads-up on the likelihood of building programmes in the education and commercial sector being progressed would be most welcome. This would provide much-needed foresight to the construction-based suppliers who at the moment are struggling to deal with the here and now. It almost goes without saying, but long-term planning is everything in business.

Supply and demand quandary

Despite the emerging global health crisis, 2020 was the best-ever manufacturing year for Recticel and Gradient. We're anticipating similar success this year. However, all the while uncertainties remain over when and how lockdown restrictions will be lifted, then the construction industry will be faced with a challenge on how best to juggle supply and demand issues. Suppliers worldwide will be dealing with the same quandary: order too much stock and we could be left with a surplus due to building projects being delayed or cancelled. Conversely, should suppliers proceed with more caution there will be concerns that ongoing restrictions could lead to manufacturers not being able to meet product demands. A supply chain needs continuity to function properly, but as has been said many times throughout this pandemic, these are unprecedented times. Business strategies the world over are – to a certain extent – being led by governments, which in-turn are being dictated to by the virus.

The future is an ever-changing picture. The best forecast I can currently make is that we will continue to supply our distribution and waterproofing partners with the materials – and details of building projects that are in the pipeline – in order to keep their end of the building supply chain strong. I'm sure 2021 will be a much better year for the UK construction industry and the world in general. By being patient and following health guidelines, I believe summer will see us in a much better position to put delayed business plans into practice.  

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