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President’s Column May 2020

Posted on by in News

We’re all acclimatising ourselves to new ways of working. For most steelwork contractors the restrictions have resulted in home working and social distancing in factories and offices, where being organised and planning work around the social distancing requirements is paramount. There were some mixed messages at the start of the lockdown, but this was a temporary measure to introduce better health and safety measures and the majority of sites in England and Wales are now open.

The social restrictions have now been in place for six weeks as thoughts focus on the future and the ‘new normal’. Most of us have taken to virtual meetings using ‘video conferencing’ and while for many this was a new way of communicating, the benefits of not having to travel long distances for short meetings are clear enough. As one CEO put it, “for a meeting in London I usual get up at 5.30am catch the 7.30am to London, hold a meeting from 10.30 until 15.30 and take the 17.30 train home. With video conferencing I don’t have to leave the office and I can have five meetings a day”. The benefits of virtual meetings are obvious and its highly likely that the new normal will involve less travelling and more virtual meetings. It’ll not be just the FD that likes that one, the dog gets an extra walk.

The industry is also looking forward and trying to gauge what the steelwork market will look like in Q3 and beyond. We may be concerned that clients could shelve projects during the lockdown and only proceed when the uncertainty is over. This will surely have an effect on the construction market in Q3 and Q4. This is why the BCSA wrote to the Rt Hon Alok Sharma MP, Secretary of State for Business, Energy and Industrial Strategy, urging him to encourage the public and private sectors not to suspend projects, but to continue with their schemes and, as a matter of urgency, progress with the infrastructure projects promised in the budget so that the work is brought on-stream later this year. I think this message was clear and I was very pleased to see HS2 recently get the green light. This is a sector that gets cash into the GDP very quickly, and that’s really important for everyone. Every pound spent in infrastructure could generate nearly three into the GDP.

BCSA has also been trying to estimate the effects of the lockdown on the market for constructional steelwork. Assuming that the lockdown is in place for between 6 and 8 weeks and that construction sites continue to implement the social distancing guidelines, the estimate is that the effect will be to reduce the market by 46% in Q2, 5.1% in Q3 and to gain 5.5% in Q4. They also estimate the market will grow by 7.8% in 2021. This is only one estimate and if correct would be one of the better outcomes.

The good news is that the constructional steelwork industry is in good shape. Supply chains are doing their best to service customers with the supply of steel stock, engineering, fabrication and materials right through the chain. I for one, have been really impressed by the can-do attitude of the industry, one that keeps everyone as safe and operational as can be.

Tim Outteridge
BCSA President

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