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President’s Column: January 2021

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BCSA President Mark Denham

At the time of writing this article (7th December), we don’t know whether we will have a Brexit deal or perhaps yet another transition extension. What has been pleasing is how resilient the steelwork industry has been so far to the effects of Brexit and COVID-19, and its important that furlough will still be an option for some of us in Q1 next year. I was asked by the BCSA to write an uplifting article for the end of the year. I’m sorry I couldn’t, I just think it’s going to be a ‘right slog’ next year for the vast majority. After the Christmas relaxation, we can only expect ‘Lockdown 3’ sometime during Q1 2021 and I don’t really see much improvement until Q3 and Q4 of 2021.

Some companies are very busy, but how many of these contracts were secured at very competitive prices against a backdrop of material prices going ‘North’. Steel producers need to increase prices to have viable businesses, they have armies of people working on exactly how much they think they can increase prices without tipping over the perceived pricing point to prevent that steel contract from commencing, or to push that contract to another material. Over the years I’ve noticed that as soon as there is any hint of a steel price increase it’s headline news, the concrete industry follows suit, but their price increases seem to go under the radar. The only thing I wish, is that steel producers could give a moment’s thought to other parties in the supply chain who might also need to increase their prices to cover rising overheads rather than just passing on those steel price increases.

PI insurance is going through the roof. I was told a story of one Principal Contractor whose PI was in the order of £200,000 per year. They had one claim on their PI due to a cladding sub-contractor going bust on them, leaving them to pick up a claim for a fault on the cladding. This was the extent of their claims history. Their broker approached every known PI insurer and eventually managed to place the business with a number of different insurers on the day of the renewal, despite starting the process months ahead of the renewal date, and the PI number involved seven figures. Credit markets are tightening and I’m glad we have credit cover in place going forward, as I certainly wouldn’t want to be self-insuring. There has been no decision on extending the ‘reverse VAT’ implementation date, which is due to come in at the end of Q1 2021. All Tier 2 construction companies will be adversely affected by this loss in cash and you won’t get it back until you cease trading.

One of the developments that I’m pleased about is that the steel construction industry hasn’t waited for legislation from the tragic events of Grenfell Tower, but instead has pushed on and developed a specification for the design, application and inspection of intumescent coating systems. This specification is part of the 7th edition of the National Structural Steelwork Specification, which will come into force on 1st January 2021. In tandem with this BCSA has developed a Responsible Painting Co-ordinator (RPC) training course, which will be launched in the New Year. This will be a game-changer in much the same way as the introduction of the Responsible Welding Co-ordinator was and will improve competence within the industry.

Mark Denham
BCSA President

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