President’s Column: March 2021
Brexit and COVID-19 combined were always going to make life very difficult in a heavily saturated market. Although market conditions are still challenging, many can now see a rosier future going forwards. I was listening to a leading economist, Roger Martin-Fagg earlier this week. He was talking about money supply and that, for the most part, many households have more spare cash now than they’ve ever had. This means that when lockdown restrictions are lifted, people will spend like they’ve never spent before, and the country will move into a “boom” period. He is expecting this to start from around April and I think this will mean that most steelwork contractors will be busy from Q3/Q4 onwards this year. The “boom” should last for a good year, before spending patterns return to normal.
A deal was done for Brexit, but this is only the beginning of the Brexit process. Some analysts predict that it might take five years for the process of Brexit to be seen as completed. If we listened to the UK media, we could easily become very despondent, “a lost decade” or whatever, but perhaps the situation isn’t quite as bad as we think. The asset value of the UK as a whole is said to be in the order of £10 trillion and the UK owes £2.2 trillion. If the UK was a company, would you say it was financially over leveraged? Probably not. There will be challenges going forward, but they are not unsurmountable and, the financial “boffins” are expected to let inflation increase to say four to five percent over the next couple of years, which will eat away at those borrowings.
Despite valiant work done by the BCSA on Reverse VAT over the last two years, we will have failed to stop this legislation coming into force at the time of publication. This will be a drain on cash flow at a terrible time for our industry. This, coupled with an upsurge of work, could very easily lead to companies running out of cash during the “boom”, and more importantly the financing of this “boom”, prior to being paid for the work.
One current area of BCSA activity is on sustainability, specifically carbon, which remains the hot topic of conversation. The BCSA has not been idle, having formed a pan-steel sector group to update and refresh all of the sustainability support tools and materials that have demonstrated steel’s excellent sustainability credentials as a framing material in the past and that will continue to do so through the “boom” that is coming.
These new sustainability support tools include a consolidated Roadmap to net-zero Carbon by 2025 for the constructional steelwork sector, a revised BCSA Sustainability Charter which will include commitments to address the climate emergency and a range of carbon footprint tools that allow companies to determine both their company’s carbon emissions and individual project carbon emissions. These tools will be launched later this year and are sure to help BCSA members demonstrate the very positive steps our industry is taking to tackle climate change.