President’s Column: March 2022

The state of the world is such now, that the BBC now feels it has to explain what NATO is to its audience. It’s difficult to comprehend how anybody under 40 wouldn’t have any knowledge of NATO. It’s clear that the new generation of 16- to 24-year-olds have differing skills than we did when we were their age, not worse, just different. It’s also clear that they have differing aspirations for their careers and work life balance. Top companies will need to be agile enough to find a compromise between the industry’s needs and the needs of the next generation of employees. Managing colleagues in the office is clearly different to managing a hybrid work force.

The BCSA has been a very successful trade association and is admired by other trade associations, both in the UK and around the world. The historic model was however dominated by the influence of its chief sponsor, British Steel/Corus/Tata Steel, who routinely ploughed millions into the BCSA to fund market development. Unfortunately, that income stream is no longer available and although the valuable contribution of sponsors for the “Steel for Life” initiative has been hugely appreciated, the funding for market development has reduced. The BCSA will need to change its strategy to ensure its as relevant tomorrow as it is today. The CEO and the executive team have tasked an external management consultant to help with identifying the BCSA’s strengths, weaknesses, opportunities and threats. Although BCSA members put on site half of the structural steelwork in the UK and Republic of Ireland, there are far more structural steelwork companies that are non-members. I firmly believe that the average BCSA member is better prepared to execute a steelwork contract than a non-member and, as such, the BCSA has a duty to try to reach out to the non-members to sell the benefits of membership.

In the last couple of years, the construction industry has had quite a lot of bad press in relation to quality, government in particular is demanding the industry changes for the better. If it doesn’t, they will have no choice but to put in place legislation to force a change.

Changing the subject, one way or another I guess we are all waiting for confirmation of energy price increases for our companies and, in addition, what will be the effect of energy price increases for our supply chain. My energy broker last week issued budgetary guidance for expected increases in electricity costs for later on in the year, “expect a 90 to 100% increase, assuming no invasion of the Ukraine” I was told. This roughly equates to a £10 per tonne increase on overheads. This, coming on top of large increases in other overhead costs and wage inflation, can only end in further increases in the price of fabricated steelwork. This year looks as though some of us might be busy fools, with previous steel price increases hitting hard during this period of extra demand caused by the recovery from COVID. I was told the other day that costs for shipping containers is still way above pre-COVID costs, but the costs now are starting to reduce. This might just be the first signs that the world’s economy is starting to correct to a more sustainable financial model. Let’s hope so.

Mark Denham
BCSA President