UK Construction & manufacturing industries enjoy growth in uncertain times
Sean Ofsarnie, Director of Resapol, discusses the current upturn in fortunes of the construction industry, despite projections that Brexit would hammer the UK economy.
Ever since the UK’s landmark vote to leave the EU in June last year, much has been made of the potential economic impacts of leaving the world’s largest trading bloc. It’s fair to say that the initial diagnosis from the media wasn’t great, and it left many worrying about the future prosperity of their families and businesses. At my business we’re completely apolitical, and no matter what our individual staff members think about current affairs, as a company we’re 100% dedicated to rolling our sleeves up and making the best of whatever comes our way. So in the wake of the vote, that’s what we did; we got to work as usual.
Many months on, the reality hasn’t been quite as gloomy as predicted. In fact, some industries are defying expectations and enjoying a strong period of growth, one of which is my own company, Resapol. Amid the negative headlines I had assumed that we were bucking the trend, but recent research has suggested that, in our industry, things might be looking up across the board.
According to a study by Markit/CIPS, in December, the construction industry experienced its fastest growth in new orders in over a year. The report shows a better than expected outlook for the sector amid the uncertainty that’s affected the market since the Brexit vote last June.
Housebuilding was one of the major drivers behind the growth, with significant efforts being made to deal with the ongoing housing crisis. Housebuilders are scrambling to redress the issue, which has left young people struggling to buy a home, and has increased homelessness across the UK’s cities. This increased housebuilding has led to a row over the increasing prevalence of construction on green belt land. With government minister Sajid Javid due to announce a new national housebuilding policy in the coming weeks, this increased housebuilding could be set to increase or decrease. It’s worth keeping an eye out for this announcement, as it could offer clues to the prosperity of the construction industry in the near future.
A separate survey of the manufacturing sector showed that it underwent its fastest growth for two years, and that exports had been helped by the weak pound. In a survey of 600 companies in the manufacturing sector, it was found that there had been an increase in enquiries from the US, Europe, China, the Middle East, and Asia. This demand has been driven by This increasing demand from corporate entities overseas has been a driving factor behind the strong performance in both sectors towards the end of 2016.
However, despite the positive news, there’s an elephant in the room; the weakening value of the pound. This has proven to be an issue, driving up the cost of materials, and making imports more expensive. On top of this, it’s an inescapable fact that the process of withdrawing from the EU has not yet begun. Once Article 50 is triggered and the negotiations begin, the markets are likely to get spooked once more, at least in the short term. But, for now, it’s promising that the worst fears of economists have not come to pass. We’re going to continue working hard and providing a good service to our customers. That’s done us well so far, so we’re going to carry on doing it, to ensure that we pull through this period of uncertainty.
Resapol is a construction chemicals supplier with depots based across the UK. The company’s wide-ranging infrastructure allows competitive next day or two day delivery.