Thursday, 27 January 2011

It's just the beginning

How far along the road to recovery are we?

Since we returned to work after Christmas I have sensed a notable change in atmosphere and confidence across the industry.

It seems like a number of organisations are making announcements to reduce their costs since they have returned after the break.

I suspect that during 2010 many companies were hanging on, waiting for the market to improve. Unfortunately that has not happened and is unlikely to happen in the near future. I would guess that when the Directors of these companies sat down and looked at cash in the bank and opportunities going forward, some fairly drastic measures had to be taken.

Consultancies would have looked at their costs and realised the only option is to cut resource to minimise outgoings. It is clear, from the fact that there are several small to medium sized construction businesses that have gone into administration since the New Year due to cash pressures and lack of future pipeline, that in some cases, this has not been enough.

I think this process will continue right through 2011 and beyond. I think the last two to three years and the forthcoming two to three years are likely to be the most significant in construction for at least a century. There are many theories of what the impact of this reduction in construction work will be, but I hope that something positive comes out of such a negative situation.

As an industry we can hopefully embrace this period and look to find more efficient ways of delivering buildings to the highest standard.

The Government is putting huge faith in the private sector to drive recovery and with construction being one of the most significant industries in the country, clearly we will all have our part to play in the economic recovery process.

Thursday, 6 January 2011

2011 - A Challenge or an Opportunity

Christmas - traditionally a time of excess. Will it be the case in 2011?

As I recovered from the excesses of Christmas and New Year, reading the press and watching the news, I gradually felt myself slipping into a state of depression.

The media have jumped on the band wagon of how bad 2011 is going to be. The word ‘challenge’ has been used countless times with reference to the next 12 months. As increased fuel prices are coupled with the challenges of an economic downturn, it appears doom and gloom loom large for us.

This sentiment was reinforced even further with Tuesday’s VAT rise – another fantastic opportunity for the media to ram home how bad life is going to be for us all. This incessant drive from the media to convince the whole country that the future is going to be dreadful casts a huge cloud over everyone. So, taking all of this in over the festive period, it could have been for me easy to reflect and think how depressing the forthcoming year is going to be.

However, with this perspective Christmas 2011 is going to be a long way away and every week is going to feel like a month. For those who believe that the glass is half empty, this burden is going to wear heavy for a considerable time and I do worry for the mental health of the whole country as the recession continues to be sustained.

As we all returned to _space group, this week I, was keen to look at the positives of the current situation. Whilst undoubtedly, the environment is changing and there will be cuts in spending in some areas, this can also be considered as an opportunity. Certainly these changes are significant enough to force new thinking in the construction industry. Our clients need and expect large percentage savings off their capital expenditure and the increase in energy costs is forcing us to make our buildings perform better.

All of this will encourage our industry to look for new ways of delivering our services and improve the outputs from what has been an underperforming industry.

I was very keen to communicate this positive outlook to everyone across _space group when I returned so that we can start the year in the right frame of mind with the energy to take us through what will be a different 2011. With our eyes open to opportunity hopefully we can carry our business forward for many years to come, through investing in the future and thinking about innovation.