As the managing director of Halifax-based Elland Steel Structures, BCSA president Mark Denham has witnessed both Brexit and Covid-19 stop decision makers in their tracks and take a ‘wait and see’ approach before committing to construction programmes.
“When they’re unsure what’s going on in the market, they stop. So, during the elections and all the uncertainty over Brexit, the orders stopped,” he says. “Market conditions deteriorated around November, December and January. Now, as steelwork fabricators, we were still busy but the gestation period means we feel the effects months later.”
“It’s been the same with Covid. People in our industry who weren’t busy in March, April and May weren’t hit by Covid – it was other things. Now we’re seeing the market struggling to the end of the year but we do see signs of a lot of work coming to fruition that will keep us busy throughout 2021. It’s the same lag, there’s just a different reason for it.”
And this time-lag means that the industry is out of step with the rest of the UK economy. While other industries took advantage of the furlough scheme, the construction steel industry was still hard at work fulfilling orders. Now, when the scheme is coming to an end, is when BCSA members need the furlough scheme to keep their staff employed.
Denham’s own company is a typical example. Elland Steel had three large contracts to fulfil that were commissioned back in 2018: Wood Wharf Building 3, part of a 15-storey building in Canary Wharf; Kings Cross S1, a 12-storey office block; and Building 100, The Embankment Manchester – a nine-storey office building in Salford. In total that is nearly 5,000 tonnes of steel worth £15m to Elland.
None of these contracts could be delayed, so through the furlough period Elland’s 45 operatives on the shop floor were still working normally (albeit with extra PPE, social distancing and hand sanitising stations) while 45 office-based staff worked from home.
“For us it was like the phoney war – it didn’t affect us that much. The experience of my company was that the vast majority of our sites were not shut down during February and March,” Denham reports.
“There was the odd day when sites were shut and obviously measures were taken to mitigate risk and there were issues with hotel accommodation etc., but generally sites carried on running. For these type of sites – and larger – I think our experience was pretty similar to that of other steelwork contractors. I think it was a little more difficult for smaller sites where some decided to cease activities straight away but they probably re-opened within two to three weeks.”
The challenge now, Denham says, is to persuade the government to modify its ‘one size fits all’ approach and recognise that the construction industry is not like, say, the hospitality industry. There’s no ‘eat out to help out’ equivalent to help maintain cashflow for construction firms.
“We’re lobbying government for an extension to the furlough scheme for construction because now we’re hitting this dip in demand,” Denham argues. “Everyone in construction is affected, whether it’s the concrete guy, the cladding guy or steel: every element in the construction industry is facing the same issue.”This article was first published in the September 2020 issue of The Construction Index magazine. Sign up online.