In today’s news, we will look into the property market in the UK, which is displaying signs of distress at an increasing rate on a daily basis. Small firms, who make up the backbone of the sector, are having a difficult time as a result of declining demand, rising loan rates, and increased costs, all of which have led to an increase in insolvencies. These factors have combined to create a difficult environment for small businesses. Meanwhile, the journey towards circular cities, nevertheless, is fraught with an urgent issue regarding resources. In addition, the volume of construction work carried out in the UK showed signs of improvement in the month of July. Moreover, the construction business in the UK is home to one person who identifies as neurodiverse for every four persons working there.
‘It’s Difficult Out There’: UK Housebuilding Sector Fractures Daily
Original Source: ‘It’s tough out there’: cracks in UK housebuilding sector grow by the day
Small enterprises, the sector’s backbone, struggle with diminishing demand, rising lending rates, and greater costs, leading to rising insolvencies.
Fairgrove Homes managing director Steve Midgley says, “It’s tough out there.” One of Britain’s army of tiny housebuilders, his east Midlands firm constructs approximately 50 homes a year. It faces dwindling demand, rising borrowing rates, manpower shortages, and expensive material and pay expenses.
“It’s taking longer for people to sell their own house,” says Midgley. It’s taking much longer to swap contracts. After the reservation, we’re talking three or four months, whereas we used to have four to six weeks. And that all puts stress on working capital, work in progress, and everything.”
The housebuilding market, a vital indicator of consumer confidence, is cracking daily. Barratt Developments, one of the UK’s leading housebuilders, announced it would build 20% fewer homes this year. Another major builder, Taylor Wimpey, reports that 27% of its first-time purchasers had mortgages of more than 36 years.
To entice cautious purchasers, Staffordshire-based Cameron Homes is providing discounts and free carpets and upgrades.
The firm’s land and planning director, Kate Tait, previously worked at Persimmon. Due to uncertainties about mortgage rates, people are taking longer to buy a property. “Not just for the first two years, but what’s going to happen beyond that.”
Since December 2021’s record lows, the Bank of England has raised rates to 5.25%, sending shockwaves across the housebuilding business.
“People are much more risk averse and they want to see a house nearly finished before they commit,” Midgley says. “In the last few years we’ve been selling plots at a very early build stage and in some cases before they were started, and that has been a real shift change.”
The Nationwide building society reported last month that UK house values plummeted at the fastest yearly pace in 14 years. Prices have fallen 4% from last summer’s peak, and economists expect more. With unemployment low and more individuals on fixed-mortgage terms than before the financial crisis, a full-blown property meltdown in which values plummet by 20% or more is improbable.
Sales and profitability have plummeted as big housebuilders cut projects and land purchases due to the crisis. Taylor Wimpey’s profits are predicted to half, while Barratt’s will decrease by double digits.
Cameron aims to build 200 to 220 homes this year, down from 250 to 300. Newbuilds are cheaper to run and require fewer home upgrades, according to Tait.
“We still have demand,” Midgley says. As always, good locations and correct pricing.” A two-bedroom flat in Fairgrove’s biggest project in Kimberley, Nottingham, costs £195,000.
Aynsley Lammin, Investec’s building expert, predicts a 25% drop in UK housing completions in 2023 to 177,400 before recovering to 135,700 in 2024.
He anticipates “this downturn to be very painful but not as bad as during the financial crisis of 2007-08,” when housebuilding plunged 40% from peak to trough and prices fell 20%.
The new home decline will hurt the economy. Charlie Campbell, an analyst at stockbrokers Liberum, anticipates newbuild completions to decrease by 20%, resulting in a 0.6% damage to GDP this year, with smaller enterprises suffering more than larger ones. House Building accounts for 3% of the UK’s economic output.
He argues, “The big builders in the UK have lots of cash on the balance sheet.” “Smaller builders tend to run for debt, but debt is costing them more and is probably less available. Another issue is that huge ones have lots of land. Thus, delays aren’t a big deal. But for some of the smaller ones, planning and other delays really make it quite difficult.”
British construction’s 342,000 small and medium-sized enterprises form the industry’s backbone. Construction has experienced more insolvencies than any other sector in the past year and is responsible for roughly one in five firm failures in recent months. According to the Insolvency Service, 1,122 construction enterprises went bankrupt between April and June, the largest since spring 2009.
Journey to Circular Cities: Materials Issue
Original Source: The journey to circular cities: the current problem with materials
Andrea Lockerbie questions if recycling cement, concrete, and steel makes construction more sustainable and how to create circular cities.
Our towns, highways, and infrastructure are made of environmentally damaging materials.
The building industry utilises the most raw resources, generates the most trash, and accounts for 25% of UK carbon emissions. It needs updating.”
The Green Alliance’s Circular Construction: building for a greener UK economy paper summarises why the construction sector is under pressure to adopt circularity.
Green Alliance wants the government to set a construction-specific resource-reduction objective and prioritise financial incentives, circular design, retrofitting, and better data.
According to the research, new buildings must emit 70–80% less carbon by 2025. “But energy efficiency will not address all the sector’s environmental impacts,” the research says. “Material use accounts for most construction emissions.”
Circular cities: net-zero progress
UK Fires, a research effort that uses current technology to accelerate the transition to zero emissions, states “the impacts of construction are primarily about the use of materials: primarily steel and cement”.
Its Absolute Zero report argues that blast furnace-produced primary steel and all cement manufacturing methods are incompatible with zero emissions.
Concrete, second only to water in global consumption, is made of cement. The Global Cement and Concrete Association estimates that cement production emits 7% of global CO2. In 2018, the UK concrete and cement sector emitted 1.5% of GHGs, according to the Mineral Products Association.
Cement production produces two types of emissions.
However, cement and concrete emission reduction methods are evolving. Cambridge Electric Cement, found by Cambridge engineers, is a promising option. They are expanding their emissions-free cement recycling technique.
UK Fires estimates that 60% of cement emissions come from the chemical reaction that turns limestone into clinker. Kilns heat with fossil fuels and waste.
Mixing clinker with additional ingredients, typically byproducts, makes lower-emission cement. Cambridge engineers have developed a zero-emission clinker-making process.
Dr. Cyrille Dunant discovered that used cement chemistry is nearly equivalent to that of lime-flux utilised in typical steel recycling methods.
The scientists found that replacing this lime-flux with old cement powder from demolition sites generates a slag that floats on the liquid steel as the steel melts. This slag is nearly equivalent to the new Portland cement clinker when cooled quickly and processed into a powder.
Dr. Philippa Horton, University of Cambridge engineering department business manager, says, “When you produce cement, there are two different types of emissions associated with it. Your chemical process releases carbon dioxide. In a kiln, fossil fuels heat raw materials to high temperatures, releasing emissions.
Old cement paste eliminates process emissions. First-made cement released carbon dioxide. Reheating it to “re-clinker” it doesn’t emit carbon dioxide because it’s already gone through that chemical reaction.
Old cement paste eliminates process emissions.
“You could do that in a kiln, but you would have emissions from heating it. This is clever—we use the electric-arc furnace instead of a kiln to make steel.
It uses the energy needed to heat the steel to re-clinker our clinker. That’s great since electric-arc furnaces consume energy and the grid will hopefully be decarbonized.
“Then you have a way of producing cement with green electricity and no process emissions because you are using a waste product that has already given off the CO2.”
80 kg and 100 kg furnaces were used for lab-scale and slightly larger-than-lab-scale studies. Horton says, “We are now looking to scale that up, to see if those trends continue to be successful when we are in a much larger-scale furnace. We’ll do that in 18 months. We should have a full-scale demonstrator by year’s end.
The team will also test “real world” input materials like “good” aged cement and well-controlled steel. Horton says, “The next step is to ask: ‘what is the operating window in which this function works, when is the steel too dirty or has too many contaminants? How good must cement paste be?
“The hard part is that we are completely reconfiguring a supply chain, so we have to form new connections with different industries.”
Cement 2 Zero, directed by the Materials Processing Institute and supported by Cambridge University, is testing this with supply chain players Atkins, Balfour Beatty, Celsa, Day Aggregates, and Tarmac.
Horton says the team is optimistic, but it’s early: “Big construction projects email me asking for cement. We’re currently lab-testing it.”
Over the following two years, the goal is to study the method and commercialise it. The supply chain’s considerable investment in the initiative illustrates its willingness for such solutions.
Limits apply. The team estimates that the new technique might meet 25–50% of 2050 cement needs, thus additional cement solutions or more efficient cement use would still be needed. UK steel scrap is shipped for recycling due to limited domestic steel recycling capabilities.
Blast furnaces make steel from iron ore and coke, another building polluter. Steel production emits 8% of world GHGs, according to the British Constructional Steelwork Association.
Absolute Zero research states that blast-furnace chemical reactions that extract pure iron from iron ore need carbon from coal or coke and produce GHGs, making new steel impossible in a zero-emissions economy. Recycling more steel in renewable-energy electric-arc furnaces could fix this and enhance steel reuse.
We are stockpiling recycled steel to sell to anyone who wants it.
Cleveland Steel & Tubes’ managing director, Roy Fishwick, has been re-testing and reusing leftover oil pipe for decades. Over the past decade, steel reuse has “gone bananas,” with demand outstripping supply.
The London Plan 2021 requires Whole Life Carbon Assessments and Circular Economy Statements for large-scale London developments. The public, investors, clients, asset owners, and landlords who seek low-carbon or net-zero buildings stimulate demand.
Cleveland Steel & Tubes recycled 13.5 tonnes of steel for Holbein Gardens. Grosvenor’s first net-zero London office was in high demand. Oakley Capital signed a green lease for Holbein Gardens.
Fishwick said some London businesses are willing to pay more and make more effort for green “firsts”. It’s hard to encourage people to think beyond their own projects. “We are trying to establish an inventory of reuse steel to sell to anybody and everybody that wants it,” he explains.
“People ask, ‘Can I use it?’ and lose interest if they can’t. They should question “Can somebody use it?” and endeavour to get those things into the circular economy. This will assist the earth if they can do it for more than steel.
“If you only look at your own job, you might have some benefit, but you really get a lot of PR and not much benefit. Release all the materials you can to make the largest difference.”
He says the design, specification, manufacture, and redesign process is problematic. “My biggest business challenge is securing material people won’t need for 6-18 months. They may alter their thoughts because designs change, the client moves the floor, or whatever, and then none of it works.”
My biggest business difficulty is securing material people won’t need for 6-18 months.
Physical and economic issues exist. Fishwick recently visited a London job: ‘The steelwork was wonderful, but there was no way to move it out of that building and onto a lorry without the project investing roughly another £300,000, and there just wasn’t enough steel in there to make it rational. To reclaim the steel, you might pay £1,000 per tonne, which is what it costs from the mill.
Carbon or cost? As a pragmatic, carbon wins over cost. But if you make it so expensive, people will find every means to avoid it. That job’s recommendation was simpler. If we can’t do it all, let’s talk about the last two or three floors and see what we can get.” The building had seven floors.
Reusing as much steel from ancient buildings and selling it should be the priority: “Interest is high from demand. Lack of supplies to meet demand is the main threat.
To encourage maximum material reuse, Fishwick thinks bidders should demand it. Steel reuse is marginal since not everything can be reused.
Fishwick estimates that 30–50% of project steel must be new. Supporting reuse demand and building a market is the next step.
Green Alliance claims there is “still plenty of low-hanging fruit in the improvement of resource use and climate impact” that might boost construction performance.
It wants the government to “trigger action now, to ensure the industry is fit for the future” to cut construction raw-material use by 35% by 2035 utilising current technologies and best practices.
UK Building Output Rises in July
Original Source: UK construction output bounces back in July
July CIPS PMI construction statistics showed UK construction production growing again.
After a June dip, UK construction output increased. Commercial building projects, the largest since February, have fueled this development.
Civil engineering projects contributed, but residential construction activity decreased.
Many CIPS PMI survey respondents indicated increased borrowing rates and economic uncertainties harmed business order books in July.
Due to lower demand and supply concerns, supplier delivery times improved the most since March 2009.
UK PMI rose from 48.9 to 51.7 in July. Five months’ high. However, building output only increased moderately.
Residential construction challenges.
Commercial buildings grew 54.4 and civil engineering 53.9. However, house building fell 43.0%.
Residential building has been declining for eight months, but it has eased since April.
“A return to growth for construction output and the fastest upturn in supplier performance since 2009 are certainly reasons for encouragement for the sector,” said Beard Construction finance director Fraser Johns.
Once again, commercial building and civil engineering continue to perform the heavy lifting for the industry as residential building continues to experience significant pressure in a higher interest environment’, he added.
In July, construction firms reported fewer customers and slower decision-making due to rising financing rates.
New project growth was sluggish in the most recent survey.
Construction output has increased employment.
July saw the largest construction job growth since October 2022.
Some employers said there were more qualified individuals, encouraging them to hire more. Others said long-term corporate growth plans increased their personnel.
July building material demand dropped. Over the past two months, purchasing activity has decreased, reflecting efforts to reduce stock.
Suppliers delivered materials faster due to lower demand and better material availability. Delivery times were the shortest in nearly 14 years.
Supplier competition helped some participants negotiate better costs. However, growing inflation and wages raised material prices.
Higher interest rates worry about customer budgets
Participants were hopeful about construction production this year. Higher interest rates may strain client budgets.
“As we hopefully turn the corner in the battle against inflation, the hope is that this will continue to nurture client confidence to commit to projects,” said Fraser Johns.
Our customer talks, cost planning, and supplier dialogues all contribute. “While there are good reasons to be optimistic for the back end of this year, we mustn’t get ahead of ourselves,” he added.
One in Four British Construction Workers Is Neurodiverse
Original Source: One in Four UK Construction Workers Identifies as Neurodiverse
According to a new NFB, CITB, and People’s Partnership report, 25% of UK construction workers are neurodiverse.
The UK average is 1 in 7. ADHD dominates the construction industry’s neurodiverse population, accounting for 54%.
Neurodiversity promotes the many ways human brains work, learn, and process information.
OnePoll painstakingly surveyed over 1,000 UK construction industry people between 20th and 30th March 2023. Its findings illuminate neurodiverse people’s experiences and choices in this crucial field.
34% of respondents said their neurodiverse condition increased their passion for construction, while 5% said it discouraged them.
Construction inclusivity is improving. 67% of respondents believe the sector supports and accommodates neurodiverse workers. After disclosure, 80% of neurodiverse workers reported workplace improvements.
The data highlights neurodiverse people’s ongoing struggles. 40% haven’t told their employers. Stigma and shame lurk.
Joe Cook, NFB Senior Vice Chair, called for stigma reduction in response to the findings. “Full support can only materialise when our workforce challenges are transparent,” he said. Cook praised the sector’s ability to attract neurodiverse talent but stressed the need for more help.
Lawrence Webb echoed this. He stressed the entitlement of neurodiverse people to “full understanding and support” from industry peers.
The NFB, CITB, and People’s Partnership have reaffirmed their commitment to creating an inclusive construction industry in light of the study’s findings. These findings will spark workplace neurodiversity discussions outside of construction.
Summary of today’s construction news
Overall, we discussed Managing director of Fairgrove Homes Steve Midgley says, “It’s tough out there.” His company in the East Midlands is one of the several in the United Kingdom that specialise in building micro dwellings. Demand is falling, interest rates are rising, workers are scarce, and production costs are high. Meanwhile, Andrea Lockerbie wonders if circular cities are possible and if recycling cement, concrete, and steel makes construction more sustainable. Our cities, roadways, and infrastructure are all constructed with materials that are harmful to the environment. Additionally, construction output in the UK rose following a June slump. This growth has been driven by the largest wave of commercial construction projects since February. Civil engineering projects were helpful, but residential building was on the decline. And a quarter of the construction workforce in the UK is neurodiverse, per a recent research by the NFB, CITB, and the People’s Partnership. An average of 1 in 7 in the UK. There is a disproportionately high percentage of people with ADHD (54%) working in the construction industry. Neurodiversity is an approach that celebrates the variety of human thought processes.
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