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Construction output in the UK increases by 0.2%

Construction output in the UK hit a record high in March, despite poor weather conditions and weak performances in the housing and commercial sectors

In March 2023, there was an estimated 0.2% increase in the volume of monthly construction output due to a 0.7% rise in new work, according to the latest ONS figures. Since records began in January 2010, construction output has reached its highest level of £15,616 million. This increase was partially offset by a 0.6% fall in repair and maintenance output.

“The modest increase in output will provide a measure of good news for the construction industry, especially given a large proportion of work during the month would have been impacted by it being the wettest March for more than 40 years,” said Clive Docwra, managing director of property and construction consultancy McBains.

Construction output varied across sectors

Four out of nine construction sectors witnessed an increase in output. Infrastructure and public work were the main contributors to the rise. Infrastructure work increased by 2.2% (£51 million), and public work increased by 6.5% (£48 million).

A rise in repair and maintenance output of 4.9% also contributed to an increase in quarterly construction output in early 2023. There has been continued strength within the repair and maintenance sectors across 2022 and early 2023, with all repair and maintenance sectors increasing in the quarter.

“The private housing and commercial sectors are still weak, with the 0.2% increase in the output being largely down to other work sectors. The picture in the housebuilding market in particular is not surprising because although reports elsewhere show house prices are rising, which would normally trigger an increase in construction activity,” said Docwra,

“Most developers are still planning to reduce by about a quarter the number of homes they planned, and further land purchase is also on hold until the economic forecast becomes clearer,” he added.

The weather may have helped the repair and maintenance sector

According to anecdotal evidence, adverse weather conditions in January 2023 increased the need for repair work. However, weather conditions improved in February 2023, which allowed for more work to be done in general.

There was a 12.4% decrease (£1,571 million) in total construction new orders when compared to the previous quarter. This was largely due to a decline in private commercial and private housing new orders, which fell by 22.3% (£773 million) and 18.4% (£607 million), respectively.

Six out of the seven sectors witnessed a decrease in total construction new orders in Quarter 1 2023, with the largest contributor being other new work new orders (non-housing) which fell by 9.7% (£874 million).

Private commercial new orders saw the largest decline, decreasing by 22.3% (£773 million). This was due to falls in office and entertainment projects. Infrastructure decreased by 8.2% (£183 million). However, there was an increase of 11.1% (£177 million) in public new work new orders during the same period.

Furthermore, the annual rate of construction output price growth was 8.5% in the 12 months leading up to March 2023. Although this growth rate is still high, it has slowed down slightly from the record annual price growth of 10.4% that was observed in May and June 2022.

Source: pbc today

Construction Construction Materials House Building Modular Construction

Persimmon Invests in Top Hat

UK-based developer, Persimmon, has invested in Top Hat – a leading modular house builder. This strategic investment is set to revolutionise the construction industry by improving the speed, efficiency, and quality of building modular homes.

Persimmon’s investment in Top Hat will enable the modular home builder to scale its operations and increase production to meet the growing demand for affordable, high-quality homes. Top Hat’s innovative technology allows for the construction of modular homes to be carried out in a controlled environment, ensuring consistent quality while reducing construction waste.

With this investment, Persimmon is tapping into the rising popularity of modular homes, which are an excellent alternative to traditional homebuilding. Modular homes are built in a factory and assembled on-site, reducing construction time by up to 50% while also reducing the environmental impact of building. The investment also aligns with Persimmon’s commitment to sustainability and reducing carbon emissions.

Top Hat’s modular building system allows for customisation of homes, giving homeowners the freedom to design their dream home. The modular design process also ensures that the final product is structurally sound and energy-efficient, with high-performance insulation and windows, which can save homeowners money on energy bills.

With this investment, Top Hat can now accelerate its growth and will begin production from its cutting-edge 650,000 sq ft manufacturing facility in Corby, Northampton in 2024.

Jordan Rosenhaus, CEO and Founder at TopHat, said: “Today’s announcement is testament to the innovative approach that TopHat continues to take to house building and marks a step-change for the future of housing.

“It has been clear for some time that designing and building green, beautiful homes in factories is a critical part of solving the housing crisis – and today’s announcement will enable TopHat to reach the scale where the new generation of modular homes can be made available to everyone.”

Dean Finch, Group Chief Executive at Persimmon, said: “Persimmon is delighted to announce this partnership, combining the country’s most innovative modular manufacturer with the most cost-effective volume house builder.

“This investment provides Persimmon with guaranteed access to very energy-efficient volumetric modular units as well as TopHat’s innovative brick façade to use with our Space4 timber frame products.

“This will provide further build efficiencies, manage the growing challenge of labour shortages in key trades and expand our product range for customers. Combining our complementary industry-leading capabilities alongside other significant new investment makes me excited for the opportunities ahead.”

Construction Contracts News Public Works Contract

February construction output shows encouraging bounce back of 2.4%

At the start of 2023, the construction industry showed positive signs of growth, with February construction output bouncing back by 2.4%. This is a welcome relief after a sluggish end to 2022. According to recent data from the Office for National Statistics (ONS), the construction sector has been steadily improving since last year, despite the ongoing challenges posed by the pandemic.

Key Highlights

Construction output rose by 2.4% in February 2023, following a 1.8% fall in January.
The three-month on three-month growth rate was 1.9%, the highest level since July 2022.
The private housing sector saw the strongest growth, with a 5.2% increase in output.
The infrastructure sector also showed significant growth, with output rising by 3.8% in February.

The increase in construction output is a positive sign for the UK economy, and the industry as a whole. The strong growth in the private housing sector is particularly encouraging, as this is an area that has been struggling in recent years due to a lack of investment and high demand. The government’s recent efforts to boost housebuilding, through initiatives such as the Help to Buy scheme and the creation of a new Housing Infrastructure Fund, are starting to have a positive impact.

Meanwhile, the growth in infrastructure output is also good news for the industry. This is an area that has been neglected in recent years, with a lack of investment leading to significant delays in major projects. However, the government’s commitment to increasing infrastructure spending is starting to pay off, with projects such as HS2 and Crossrail showing signs of progress.

Road works — Image by Stefan Schweihofer from Pixabay

Mike Hedges, director at Beard Construction, said: “Like many other key sectors, construction has been unable to avoid the challenges of the last nine months or so. However, it is positive to see the landscape beginning to improve with an increase in output and the highest monthly value seen since January 2010.

“While it’s encouraging to see a marginal increase in new work, we shouldn’t be surprised to see repair and maintenance continuing to lead the recovery effort. This could in part reflect customers being wary about committing to large new-build construction projects but could also reflect the emerging direction of trying to maximise value from existing assets, reducing waste and preserving embodied carbon.

“Looking beyond February at the three-month picture though, infrastructure new work was a key contributor to growth. This certainly mirrors the broad portfolio of projects we’re working on and the tender opportunities we’re currently seeing at Beard.

“It’s further proof that firms need to remain agile and pivot toward more resilient sectors that will continue to provide opportunities, such as specialised infrastructure projects for local and central government. This is especially true for those firms reliant on residential building or housebuilding, which continues to be challenging with higher mortgage rates and borrowing costs stifling new-build demand. It will be encouraging to see the challenges on these sectors ease later this year with the slowing of interest rate increases.”

However, despite the positive signs, the construction industry still faces significant challenges. The ongoing impact of the pandemic continues to be felt, with supply chain disruptions and a shortage of skilled workers affecting many companies. In addition, rising material costs and inflation are putting pressure on margins, making it more difficult for companies to invest in new projects.

Overall, the increase in construction output in February 2023 is a positive sign for the industry and the wider economy. While challenges remain, the government’s commitment to boosting investment in housing and infrastructure is starting to have a positive impact. Companies that are able to navigate the current challenges and position themselves for growth in these key sectors are likely to see significant benefits in the coming years.

Construction News Public Works Contract

Sir Robert McAlpine restructure plans will see 60 jobs axed

Sir Robert McAlpine is cutting around 60 jobs, waving goodbye to two senior directors and switching its focus to sectors rather than regions under a major rejig of the business by chief executive Paul Hamer.

The most eye-catching departures are the firm’s London boss, Alison Cox, a McAlpine board member who has been in the post for just 18 months, and the managing director of its Southern business Ian Cheung who has been with the firm seven years.

But McAlpine is bringing back Grant Findlay as executive managing director of a newly formed Buildings division and who will now sit on a refreshed group board.

It will prioritise sectors where it has been most successful; these include healthcare, commercial offices, industrial, as well as the heritage and complex schemes delivered by its Major & Special Projects team.

McAlpine restructure plans will focus on clients’ changing requirements and decarbonisation.

The recent announcement of Sir Robert McAlpine’s appointment to the Temple Quarter Enterprise Campus for the University of Bristol is a good illustration of this vision in action. The company will be working closely with this key client on a project that will make a huge impact on the city of Bristol and the local area, both socially and economically.

It is also growing the rail, transport, and nuclear sectors of its infrastructure business to drive profitable growth and minimise its exposure to ongoing geo-political and market risks.

The business will move from a regional operating model to a sector-focused model, with national centres of excellence providing projects with swift access to expertise.

McAlpine restructure plans will reduce workforce by 2.5%, but vows to remain guided by strong set of value.

The McAlpine way of Build Sure continues to underpin the business’s approach to engineering and technical excellence, ensuring the delivery of exemplary projects safely, sustainably, on time, on budget, to the highest quality.

Paul Hamer, chief executive, Sir Robert McAlpine, said: “We have been proudly building Britain’s future heritage since 1869, and, throughout our history, have successfully overcome obstacles by remaining agile and adapting to evolving market conditions.

“The challenges that the industry is currently facing are exceptional and unprecedented. In this turbulent market, we owe it to our people and our clients to carefully consider how we apply our focus and expertise over the coming years to seize the opportunities that will support us to thrive.

“These changes are needed to enhance our operational agility. They mean we can move rapidly whilst generating improved efficiency and productivity. This does, unfortunately result in a small number of roles becoming redundant, which is a difficult but necessary decision.

“This strategy provides the momentum to take Sir Robert McAlpine successfully into the next 150 years. It enables us to build on our existing strengths and realise our full potential.

“We want to be renowned for our work with clients and communities as we construct a better world for future generations.”

Civil Engineering Construction Public Works Contract

Design reset urgently needed for HS2 Euston Station

At a time when the UK government is under pressure to manage the costs of its major infrastructure projects, the latest news from HS2 Euston is alarming. The costs of the project are set to double, and a full design reset is urgently needed to address the issues and risks involved.

The HS2 Euston Project: A Critical Overview

HS2 Euston Station Concept Design - Interior — Image: HS2

HS2 Euston is a part of the High Speed Two (HS2) rail network, which is expected to provide a faster and more reliable rail service between London and the North of England. The Euston project is particularly important, as it involves the redevelopment of the Euston station in London, which is a key transportation hub for the city.

A statement from National Audit Office (NAO) into the HS2 Euston Station development warns that forecast project costs have continued to balloon despite attempts to simplify the project.

The original plans for the project, which were announced in 2017, involved the construction of a new station building and the reconfiguration of the tracks and platforms. However, it soon became clear that the plans were not feasible, as they would have required the demolition of many homes and businesses in the area.

As a result, a revised plan was developed, which involved the construction of a smaller station building and the use of a tunnel to connect the high-speed lines to the existing lines. However, this plan has also faced significant challenges, as it involves complex engineering and construction work in a densely populated and heavily built-up area.

The Challenges Facing the Project

The challenges facing the HS2 Euston project are numerous and complex. They include:

The need to build a new station building and connect it to the existing transport network
The need to construct a tunnel to connect the high-speed lines to the existing lines
The need to minimize disruption to local residents and businesses during the construction process
The need to manage the risks involved in working in a densely populated and heavily built-up area
The need to manage the costs of the project, which have already increased significantly

The Urgent Need for a Design Reset

The NAO’s report recommends the DfT works with stakeholders: Euston Partnership, HS2 Ltd, Network Rail, Lendlease and local partners to reassess the expectations for the HS2 Euston project, its budget, and the public benefits.

Gareth Davies, the head of the NAO said: “Government is once again having to revise plans for Euston HS2.

“Clearly, the 2020 reset of the station design has not succeeded.

“DfT and HS2 Ltd have not been able to develop an affordable scope that is integrated with other activity at Euston, despite their focus on costs and governance since 2020. Recent high inflation has added to the challenge.

“The March 2023 announcement by the Transport Secretary pausing new construction work should now give DfT and HS2 Ltd the necessary time to put the HS2 Euston project on a more realistic and stable footing.

“However, the deferral of spending to manage inflationary pressures will lead to additional costs and potentially a more expensive project overall, and that will need to be managed closely.”

Meg Hillier MP, Chair of the Committee of Public Accounts, added: “Attempts to reset the High Speed 2 Euston Station have failed.

“It is still unaffordable and no further forward than it was three years ago.

“Today’s NAO report shows that the redesigned station would have cost nearly double what was budgeted.

“Department for Transport and High Speed Two Ltd have wasted enough time and money. They must get Euston right next time or risk squandering what benefits remain.”

Construction

Performance Bonds: Protecting Your Business Interests

If you’re a business owner, contractor, or supplier involved in a construction project, then you’re probably familiar with the term ‘performance bonds.’ These bonds are a type of surety bond that ensures that the principal (the contractor) completes the project as specified in the contract. If they fail to do so, the obligee (the project owner) can make a claim against the bond to recover any damages or losses incurred.

At their core, performance bonds are designed to protect the interests of all parties involved in a construction project. They provide financial security and peace of mind, helping to ensure that projects are completed on time and on budget. In this article, we’ll take a closer look at performance bonds, how they work, and why they’re important.

What are Performance Bonds?

A performance bond is a type of surety bond that guarantees the completion of a construction project according to the terms and conditions outlined in the contract. If the contractor fails to fulfill their obligations, the obligee (usually the project owner) can make a claim against the bond to recover any damages or losses suffered as a result.

Performance bonds are typically required by project owners or general contractors as a condition of bidding on a project. The bond ensures that the contractor has the financial resources and expertise to complete the project according to the specifications outlined in the contract.

How do Performance Bonds Work?

When a performance bond is required, the contractor will need to obtain one from a surety bond company. The surety will typically require the contractor to provide financial statements and other documentation to ensure that they are qualified to undertake the project.

Once the bond is in place, the contractor will be required to complete the project according to the terms and conditions outlined in the contract. If they fail to do so, the obligee can make a claim against the bond to recover any damages or losses suffered as a result.

Why are Performance Bonds Important?

Performance bonds are an essential component of any construction project. They provide financial security for all parties involved, helping to ensure that projects are completed on time and on budget. Here are some key reasons why performance bonds are important:

Protects the interests of the obligee: Performance bonds provide a measure of financial security for the project owner or general contractor. If the contractor fails to fulfill their obligations, the obligee can make a claim against the bond to recover any damages or losses suffered.
Ensures completion of the project: By requiring a performance bond, the project owner or general contractor can be confident that the contractor has the financial resources and expertise to complete the project according to the specifications outlined in the contract.
Helps to mitigate risk: Performance bonds help to mitigate risk for all parties involved in a construction project. They provide a safety net in the event of a default by the contractor, ensuring that all parties are protected from financial losses.

In conclusion, performance bonds are an essential component of any construction project. They provide financial security for all parties involved and help to ensure that projects are completed on time and on budget. If you’re involved in a construction project, be sure to familiarize yourself with performance bonds and their importance.

Construction

Getting A Surety Bond or Guarantee

We understand that getting a surety bond or guarantee can be a complicated process, but it doesn’t have to be. Our team of experts is here to help you navigate the ins and outs of surety bonds and guarantees so you can make an informed decision that’s right for you.

What are Surety Bonds and Guarantees? Surety bonds and guarantees are financial instruments that provide a guarantee of performance or payment. They are commonly used in the construction industry, but are also required in other industries such as transportation and finance.

A surety bond is a three-party agreement between the principal (the party that needs the bond), the obligee (the party that requires the bond), and the surety (the company providing the bond). The surety provides a guarantee to the obligee that the principal will fulfill their obligations. If the principal fails to do so, the surety will step in and pay the obligee.

A guarantee is a similar financial instrument that provides a guarantee of payment. The guarantor provides a guarantee to the beneficiary that the payment will be made if the debtor fails to make the payment.

Why Do I Need a Surety Bond or Guarantee? You may be required to obtain a surety bond or guarantee for a variety of reasons. Some common reasons include:

Meeting legal requirements: Many industries have legal requirements that mandate the use of surety bonds or guarantees. For example, contractors may be required to obtain surety bonds to bid on public projects.
Building trust: Obtaining a surety bond or guarantee can help build trust between parties. It shows that the principal is committed to fulfilling their obligations and provides a guarantee to the obligee.
Protecting against financial loss: Surety bonds and guarantees provide protection against financial loss for the obligee. If the principal fails to fulfill their obligations, the surety will step in and pay the obligee.

How Do I Obtain a Surety Bond or Guarantee? Obtaining a surety bond or guarantee can be a complex process, but our team of experts is here to guide you through it. The process typically involves the following steps:

Determine your bond/guarantee needs: The first step is to determine what type of bond or guarantee you need and the amount required. This will depend on the specific requirements of your industry or project.
Apply for the bond/guarantee: Once you know what type of bond or guarantee you need, you can apply for it. This typically involves submitting an application and providing financial and other documentation.
Underwriting: The surety will review your application and determine whether to provide the bond/guarantee. This may involve a review of your credit history, financial statements, and other factors.
Bond/guarantee issuance: If your application is approved, the surety will issue the bond or guarantee.
Bond/guarantee renewal: Surety bonds and guarantees typically have an expiration date and may need to be renewed periodically.

At Nationwide Sureties, we understand that obtaining a surety bond or guarantee can be a complex process. That’s why our team of experts is here to guide you through it. We’ll help you determine your bond/guarantee needs, apply for the bond/guarantee, and obtain the bond/guarantee you need to meet your legal requirements, build trust, and protect against financial loss.

Construction Safety

What are construction bonds and how we can help

Construction bonds are a crucial aspect of the construction industry, providing a guarantee to the owner of the project that the contractor will complete the work as per the agreed-upon terms and conditions. These bonds act as a safeguard against potential financial loss for the owner in case the contractor fails to complete the project or fails to meet the contractual obligations.

Nationwide Sureties is a leading provider of construction bonds, offering a range of bond solutions to contractors, subcontractors, and owners. The company has a wealth of experience in the construction industry, and their bond services are designed to help businesses meet their bonding needs.

There are three types of construction bonds that Nationwide Sureties can help with: bid bonds, performance bonds, and payment bonds.

Bid bonds are used by contractors when submitting a bid for a project. These bonds provide assurance to the owner that the contractor has the financial capability to complete the project if they are awarded the contract.

Performance bonds are used to ensure that the contractor completes the project as per the agreed-upon terms and conditions. If the contractor fails to complete the project or fails to meet the contractual obligations, the owner can claim against the performance bond.

Payment bonds are used to ensure that the contractor pays its subcontractors and suppliers. If the contractor fails to pay its subcontractors or suppliers, they can make a claim against the payment bond.

Nationwide Sureties can provide customized bond solutions to meet the specific needs of their clients. They have a team of experts who can assist with bond applications, underwriting, and claims management.

One of the key advantages of working with Nationwide Sureties is their extensive network of bonding companies. They work with multiple bonding companies, allowing them to provide their clients with competitive rates and a range of options.

Nationwide Sureties also offers a range of other services, including insurance solutions and risk management advice. They understand the challenges that contractors face in the construction industry, and they are committed to helping their clients manage their risks and protect their businesses.

In conclusion, construction bonds are a vital aspect of the construction industry, providing assurance to owners and protecting contractors and subcontractors. Nationwide Sureties is a trusted provider of construction bonds, offering a range of bond solutions to meet the specific needs of their clients. With their experience and expertise, they are well-positioned to help businesses navigate the complexities of the bonding process and protect their interests.

Community Construction Manufacturing

Performance Bonds

Performance bonds are a type of financial instrument that serves as a guarantee to ensure that a contractor will fulfill their obligations under a contract. These bonds are typically required for construction projects, where the contractor is responsible for completing the project within a specific timeframe and to a certain level of quality. If the contractor fails to perform their duties as agreed, the performance bond provides financial protection to the project owner.

Nationwide Sureties is a company that specializes in providing performance bonds to contractors. The company works with contractors of all sizes, from small businesses to large corporations, to ensure that they have the necessary financial security to complete their projects.

One of the main advantages of working with Nationwide Sureties is the company’s extensive experience in the field of performance bonds. The company has been providing these bonds for over 20 years and has a deep understanding of the unique needs of contractors in various industries. This experience allows Nationwide Sureties to provide tailored solutions to meet the specific needs of each contractor, ensuring that they have the financial protection they need to succeed.

Another advantage of working with Nationwide Sureties is the company’s commitment to customer service. The company understands that contractors are often working under tight deadlines and need to have their bonding needs met quickly and efficiently. Nationwide Sureties has a dedicated team of professionals who are available to answer questions and provide guidance throughout the bonding process.

Nationwide Sureties also offers a wide range of bond types to meet the needs of contractors in different industries. Some of the most common bond types include bid bonds, payment bonds, and maintenance bonds. Bid bonds are required by project owners to ensure that contractors have the financial capacity to complete a project. Payment bonds provide financial protection to subcontractors and suppliers, ensuring that they are paid for their work on a project. Maintenance bonds provide a guarantee that the contractor will correct any defects or issues with their work for a specified period after completion of the project.

In conclusion, performance bonds are a crucial component of many construction projects, providing financial protection to project owners and contractors alike. Working with a trusted provider like Nationwide Sureties can help ensure that contractors have the financial security they need to complete their projects successfully. With their extensive experience, commitment to customer service, and range of bond types, Nationwide Sureties is an excellent choice for contractors in need of performance bonds.

https___specials-images.forbesimg.com_imageserve_5d0bfd8434a5c4000848ff32_960x0

Construction Materials Safety

Premises Bonds

Nationwide Sureties UK is a leading provider of premises bonds, which are a form of security required by some landlords or property owners to protect their property from damage caused by tenants or contractors. A premises bond is a financial guarantee provided by a third party, such as Nationwide Sureties UK, to ensure that the property owner is protected from any damages or losses incurred during the rental or construction period. Here are some reasons why premises bonds from Nationwide Sureties UK are essential:

1. Protection for property owners: Premises bonds provide protection to property owners who may be vulnerable to damages or losses caused by tenants or contractors. With a premises bond from Nationwide Sureties UK, the property owner can be assured that any damages will be covered, providing peace of mind and financial protection.

2. Compliance with regulations: Some landlords or property owners may be required to obtain a premises bond as part of their compliance with legal or regulatory requirements. Nationwide Sureties UK can provide premises bonds that meet the specific legal requirements and regulations for each situation, ensuring that the property owner is fully compliant.

3. Tenant and contractor trust: The presence of a premises bond can build trust between tenants, contractors, and property owners. Tenants and contractors are more likely to rent or work on a property that has a premises bond in place, as it provides assurance that their interests are protected.

4. Cost-effective security: Premises bonds are a cost-effective way for property owners to protect their assets. Rather than having to provide large cash deposits or rely on expensive insurance policies, a premises bond from Nationwide Sureties UK provides financial security at a fraction of the cost.

5. Flexibility: Nationwide Sureties UK offers a range of premises bond options, allowing property owners to select the level of protection that meets their specific needs. From rental bonds to construction bonds, they can provide a bond that fits your requirements.

In summary, Nationwide Sureties UK provides premises bonds that offer essential financial protection for landlords and property owners. With protection from damages or losses caused by tenants or contractors, compliance with legal and regulatory requirements, improved trust between tenants, contractors, and property owners, cost-effective security, and flexibility, premises bonds are an excellent option for protecting your property investment. Whether you are a landlord, property owner, or contractor, Nationwide Sureties UK can provide the premises bond you need to protect your interests and ensure a successful project.

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Construction

Construction output in the UK increases by 0.2%

Persimmon Invests in Top Hat

February construction output shows encouraging bounce back of 2.4%

Sir Robert McAlpine restructure plans will see 60 jobs axed

Design reset urgently needed for HS2 Euston Station

Performance Bonds: Protecting Your Business Interests

Getting A Surety Bond or Guarantee

What are construction bonds and how we can help

Performance Bonds

Premises Bonds

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