More focus on net zero than building safety

UK: The Building Engineering Services Association (BESA) claims that construction clients are more focused on meeting their net zero goals than complying with the Building Safety Act.

The claim is based on a new study carried out on behalf of BESA which, the association says, revealed a noticeable “softening” in the market as cost pressures took their toll leading to significant project delays. 

The report is said to have revealed that clients were increasingly concerned about a shrinking pool of contractors of “the appropriate quality” to deliver projects and were becoming more focused on measuring the technical competence of the firms they appointed.

Richard Hill, director at consultancy Currie & Brown, told a roundtable session of BESA members that new orders fell by more than 7% in the second quarter of this year and that, with the general economy remaining flat until the middle of next year and inflation only falling slowly, no recovery was expected until 2025.

“The health of the construction industry is also heavily dependent on the delivery of the national infrastructure programme,” added Hill. “We are at the mercy of government policy changes, so delays and cancellations in that space will constrain outputs until at least the second half of next year,” he added.

However, he noted there might be “a bounce” after the General Election next year that could help to speed up a recovery in 2025.

“All of this means there is a general default to two-stage design and build to reduce risk. Clients are also worried about financial stability in their supply chains and the amount of hidden costs coming through.”

Risk

He added that the sector’s shortage of capacity and the hardening approach of the insurance market were also adding to risk. At the same time, the introduction of the Building Safety Act and the need to achieve net zero were front of mind for contractors and clients.

The BESA members pointed out that many clients were failing to get their buildings registered under the Building Safety Act “which is their first duty”. To do that they must be working with competent organisations and there is confusion around the role of the principal contractor as they are often not appointed until after the building is registered.

“Practitioners have a heightened level of responsibility around building safety which will have an impact on the level of engagement generally and the timescale of projects,” said Hill. “This might eventually lead to new disciplines being created to meet the needs of the Act but initially the focus will be on additional responsibilities for existing practitioners.”

You can read Currie & Brown’s latest UK construction market outlook report here.