Construction Industry Growth

Construction Industry Growth

Construction industry growth in 2020 has been encouraging, but it has to slow down at some stage?

Despite being in a recession, the construction industry was reported to have grown during the early stages of 2011.

Whether this will continue through 2011 or not is anyone’s guess; but the results so far have been positive.

This is a welcome sign for many construction firms that are close to closure due to the global downturn.

However the UK is experiencing a population explosion; with more people coming into the UK from abroad and UK birth rates going up the need for houses and facilities is growing ever greater.

In 2020 we hope that Brexit will plug one of these problems.

Sector companies therefore can take a sigh of relief that things are starting to turn and the green shoots that were mentioned a few years ago now, are starting to show themselves.

In terms of marketing, construction firms should be starting to get the construction markeitng wheels turning.  Getting PR out about themselves will help in creating a media buzz. The more buzz there is, the more the marketing wheels will turn.

Global Recession

The construction sector in the UK historically has been very slow with regards to their marketing.

Relying mainly on word of mouth for new business the industry has ticked along very nicely.  Thanks to the boom years back in 2002 construction companies could freely pick and choose the projects that they wanted to work on.

This has all changed in recent years as things stopped suddenly with the world market collapse in 2009 (the so called ‘credit crunch’).

How much of this was media led and how much was actual crisis is anyone’s guess.

Many blame it on the banking industry, taking big risks with borrowed money they fell into insolvency and the need for government support was called for (as the banks were too large to fail).

The media has a way of manipulating things that is quite unique. If they shout ‘fire’ then everyone panics.  If they say all is well and things are great, everyone believes it.

The world is dominated by the media and in many ways; they have a responsibility to ensure that things tick along.  Construction industry growth has been slow, but ‘green shoots’ have been spotted.

This being the case, if the construction industry reports that all is well, and then the general consensus will be that all is well.  It has been boosted by government borrowing, but how long can it be continued to be supported?

Mega Projects

The construction industry is underpinned by the day to day building work we have all grown used to.

• Cranes dotted around our towns
• Builders doing extensions down the road
• A new housing estate on a field at the edge of the town

There are always construction projects going on around the UK, we have just grown used to walking past them every day.

However there are mega projects that the government is working on both to boost the construction sector and knock on industries, but also to improve the counties infrastructure.

Bearing in mind the London tube system was started in 1863.  The sewer systems we all rely on are Victorian also, so many construction projects either upgrade or replace.

Some of the mega construction projects would include:

• HS2 – A high speed train line linking the north and the south costing £115 billion
• Channel Tunnel – An under sea rail link between London & Paris completed in 1993 costing £17.2 billion
• Stonehenge Tunnel – A planned project to divert traffic away from Stonehenge may cost £1.6 billion
• Corssrail – A completed project in London cost £17.6 billion
• Thames Tideway Tunnel – A London sewer project to improve the victorian system costing £5 billion

After WWII the then government was tasked with a massive rebuild around the UK.  Bombed cities such as London, Hull, Manchester, Liverpool and Birmingham had to rebuild large areas due to the bombing by the Luftwaffe.

With the COVID pandemic Boris Johnson announced ‘build, build, build’ which was the largest building of infrastructure since WWII.

The UK is in debt around £2.5 trillion, which is around 96% of the GDP.

COVID saw the UK economy stalled for a year as the country stayed at home.

The First World War saw us borrowing huge amounts of money to fight a global war.

The Second World War saw us borrowing huge amounts of money again to fight a global war.

The way the government sees us getting out of debt is to spend spend spend, upgrading the UK’s infrastructure, road systems, rail systems, sewer systems etc.

Speculate To Accumulate

The policy to reducing UK debt seems to have always been to build our way out of it.

In marketing terms, this is known as you need to speculate to accumulate.

To keep the UK wheels of the economy turning is to keep working on projects.  If construction companies are building things, they are generating income and paying tax, which can be used to pay off debt or build even more.

The housing crisis in the UK has called for millions more homes to be built.

Many businesses have left their offices and the offices have been converted into flats.

Many churches have closed and their building converted into flats.

The UK high street has shops on the ground floor and flats on the second floor.