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January 2009 – Recession forges quality solutions

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Are the first green shoots of recovery visible in the new construction orders figures released by the government before Christmas? The three month rolling figures to the end of October were certainly a major improvement on the trend revealed previously.

Private commercial orders were substantially down, 17% lower than the previous twelve months, but they were 10% up over three months compared to the previous three month period. Private industrial orders were down 26% in the 12 months to October, but were 44% higher than the previous three months. Encouraging as these trends might be it is of course far too early to say any recovery is in sight, let alone under way. Construction however just might have the bottom of this recession in view.

As we highlighted in our December issue, there is a massive boost coming
to government funded construction programmes such as education and transport. The procurement process has been revealed to have serious shortcomings which mean this work is not coming through as quickly as our industry would like, but it is coming. A long term benefit of this might be an overhaul of the way projects are procured, which would benefit construction as well as the people who rely on the facilities like schools, hospitals and roads that the industry builds.

Demand for goods and services is substantially down across UK industry, but a feeling is growing that maybe we have been a bit guilty of ‘glass half empty’ syndrome. There is still work around and unprecedented steps have been tak- en to deliver major boosts to world economies. Other major work sources like the London Olympics and Crossrail are gathering pace. The fall in the value

of sterling is boosting the competitive situation of the UK’s manufacturing ex- porters. The scale of the government intervention means that there must be a chance that for once construction won’t be the last out of a recession.

Since the last significant recession that sent construction reeling in the early 1990’s the market and competitive dominance of steel has been on an upward trend. As clients came out of recession they looked with new eyes at what value they were getting for their money, and thanks to the investment in productivity and other improvements by the steel construction sector that had continued through those harsher times, there were better than ever steel solutions available.

Even now we see steelwork contractor members of the BCSA making major investments in new machinery that will deliver productivity and quality advances for years to come. Other research and development programmes by Corus and the Steel Construction Institute and industry partners are continuing.

Difficult times may still lie ahead, but the steel construction sector can be confident that it will be delivering better value and quality than ever when better times return.

Nick Barrett

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