Delegates take a break in-between business sessions.

Construction faces a different future

Published:  16 September, 2010

WARWICKSHRE: Tuesday’s Builders’ Merchants Federation’s Members’ Day gave merchants and suppliers fresh insight into the market changes they will face in the next 12 months – not all bad, just different.

The economy is not as bleak as it is being painted by the national press, argued Anthony Hilton chief economist of the London Evening Standard. “The rhetoric is bad, but the reality is very different,” he said, addressing an audience of over 170 merchants/manufactures at the BMF event in Warwickshire.

Mr Hilton was optimistic that by this time next year the economy will recover at a much faster rate.

“Of course, we will continue to get all the rhetoric, but I believe the cuts won’t be as brutal as they are telling us and that will be because politicians cannot maintain the momentum.

Roger Humber, chief executive officer of the House Builders’ Association division of the National Federation of Builders (NFB) presented a different view. “Newbuild has been hit the hardest since 2007 and is struggling to recover. That will create a significant disconnect in the housing market,” he said.

RMI will be the winner and while it will not sustain the industry in its entirety, it will keep pockets ticking over, Mr Humber explained.

Housing minister Grant Shapps’ promise to give local authorities incentives so that “housebuilders will be begging to build”, Mr Humber said, seemed unrealistic.

“A more pressing problem is the halt of site development bogged down by planning persmissions. The cost burden has stopped the industry in its tracks. Those sites ‘ready to go’ are also being delayed by higher regulatory costs and lower selling prices,” he reported.

Housebuilders will have to seek diverse ways of doing business and merchants will have to think about their business models in a different way, too, Mr Humber stated.

BMF Members’ Day also had a number of breakout sessions covering the issues of training, fraud, transport and the impact of the Building Regulations on future merchant business.

Read the report in Builders’ Merchants News September edition, published on 21 September.

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