How the construction sector can ‘bank’ on expertise

Whilst the construction sector tends to be an exaggerated reflection of the wider economy, current forecasts for this year* put it firmly in line with the bigger picture. With output expected to fall by 23% and projections estimating a £34.6bn reduction in output throughout 2020-24, things are looking pretty bleak with the ‘Brexit hangover’ and Covid-19 the main causes.

An important part of the UK’s economy, the sector accounts for 6% of output and 7% of employment, yet it is unique in its structure and profile with countless micro-companies and just a handful of major players. Trades and specialist contractors accounted for 75% of active companies in the sector in 2018*, an unusual distinction versus other sectors which underpins the benefits of small, agile businesses offering skilled workmanship.

BANKING ON SUCCESS

In broad terms, the collapse of Carillion in January 2018 mirrors that of Lehman Brothers in 2008; a catalyst to the recession and a harsh wake up call to the dangers of having an over-reliance on public sector contracts.    

Whilst many didn’t see either downfall coming, they’re both stark reminders that bigger doesn’t always mean better. The safety of a large corporation can be comforting to those who hold the purse strings, yet they usually lack the flexibility and nimble nature of smaller businesses.

As a small business ourselves, we understand the benefits that working with one can bring – less red tape, lower overheads and a more personalised (and personable) service.

There is a general acknowledgement amongst construction industry peers that joint-venture projects are growing in popularity, so could collaborative delivery be the future recipe for success?

Whilst dealing with multiple suppliers versus one main point of contact, as would be the case with a major contractor, may not be everyone’s cup of tea, businesses should play to their strengths in order to provide the best service to their customers.

LOOKING AHEAD

As far as we can see, forecasts can be broadly pooled into three categories:

  • Warehousing and industrial – should continue to benefit from the buoyancy of recent years and the subsequent impact of the UK requiring greater levels of logistics from Brexit
  • Retail and office – impacted majorly by Covid-19 and the lifestyle changes it has caused. Speculative development and office facilities, in particular, will dwindle
  • Leisure and entertainment – more than 3,000 jobs are at risk at the time of writing***, yet there seems to be a growing demand for such facilities when social distancing is loosened

As the Government continues to announce initiatives to help the UK economy grow, smaller businesses should be leveraging their size and expertise in order to capitalise on post-Covid opportunities.

More than £5bn of capital investment projects were announced on 30th June 2020 as part of the drive to ‘Build, Build, Build’ and, whilst tenders and new business opportunities are always highly competitive, investment in marketing will ensure a company, product or service is effectively communicated to project decision makers.

For example, if your business is strong in warehousing or industrial projects, then make it known in order to capitalise on the projected growth in this sector. Or, if you’ve developed a creative way to deliver socially-distanced floorplates, then shout about it.

Here at One Brand Magic, we help brands across the construction sector – including housebuilders, major contractors, design services and building products – with creative ways to reach and talk to customers. We would love to talk about your marketing challenges, so why not get in touch with us or give us a call on 0161 968 6900.

Sources

* Mintel Construction: inc impact of COVID-19 – UK – April 2020

** BBA Banking on British Jobs, October 2015

*** https://www.thetimes.co.uk/edition/business/thousands-of-jobs-face-axe-in-leisure-sector-w6jkgfbd2