Archive 2016 08

Rory O’Connor is the managing director at civil and structural engineering consultancy RoC Consulting Monika Slowikowska is the founder of UKbased construction specialists Golden Houses Developments Matthew Tucker is the managing director at Morgan Tucker Every issue we ask a panel of experts for their views on a burning topic. 7 “The government’s policy seems to focus on unifying a divided electorate and it is essential that we now build and upgrade our infrastructure to provide a solid education for all, to create a skilled workforce, affordable housing developments and an efficient transport system. “Clear and decisive action to deliver these key cornerstones is vital and will rebuild our economy, boost confidence and energise the property and construction sectors.” Monika Slowikowska “The day after Brexit, seven of our building materials suppliers told us they‘d be raising their prices in July – the hikes ranging from three to eight per cent. “Then we learned that one of our projects is being put on hold. The client’s bank has withdrawn from talks while it analyses the new economic environment. The client contacted 11 other banks and they all said the same thing: no engagement until they know what’s happening in the property market. “What’s significant here is that our client owns the property it’s borrowing against and that the funding it seeks represents just 50 per cent of its value. Banks are refusing to talk to would-be borrowers even where the risk profile is extremely low. “We expect the cost of building projects to increase and that homebuyers and developers will find it harder to borrow money. “At the same time contractors will be forced to keep prices low when competing for the remaining projects. This will result in the loss of profitability and inevitability the fall of some contractors. “However, I know our sector will bounce back. If we stay flexible, negotiate well with suppliers and clients, control our costs and become even more efficient, we will overcome these challenges. “As an industry, construction is always one of the first to feel the effects of a recession or economic downturn. “The difference this time is that the economy was essentially stable in the last few years and the natural downtime will be dramatically deepened by the results of Brexit. “I also believe many businesses have forgotten how to prepare and save for times like these. “We must also focus on what we can achieve, not what we can’t. If we toughen up, focus on the positive and look for opportunities, we can still thrive in this uncertain new world.” Matthew Tucker “There has been a slump reported because people are fearing the worst, but we don’t see evidence of that slump ourselves. “Contractors have been telling me that they have full order books – and they are telling me that they have their heads down and ‘getting on with it’ and that’s what they should do, given that it’s just not clear at the moment how the situation is going to pan out. “We have had one job put on hold specifically because of Brexit – with the client wanting to find out the situation with banks lending money. We have had another client do exactly the opposite – wanting to get things moving on their project as quickly as they can. “The important thing is that the industry has its head down and is getting on with it. We have spent the last seven years learning how to recover during and after a recession – we know how to recover. “What is clear though is that the political parties get their act in gear as we need them to guide us. “We as a business are setting budgets and targets for growth. We must all remain confident and keep the ‘business as usual’ approach. “Morgan Tucker is also focusing on sectors. The office market is one which could suffer over time. We are purposefully targeting the hotel sector, and we are being very selective about the clients we work with.” n

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