Sector - Consultancy
‘V’ is for Vaccination, Not Victory in 2021
Robin Lawson, managing director of building services engineering company, Ameon, looks ahead to 2021 and the likely trends in the construction sector.
Ameon is one of the UK’s foremost mechanical and electrical contractors, working on large scale commercial, residential and leisure developments across the country.
Winston Churchill’s famous ‘V’ for victory sign symbolised the wartime fighting spirit but in the fight against Covid-19, it is not going to be so much ‘V’ for victory in 2021 as ‘V’ for vaccine. We won’t eradicate the virus with ease, so it is with a degree of caution that I stick out my neck to predict what might happen within our industry in 2021. After all, somebody would have been in my shoes last year, and look what happened to 2020!
I suppose caution is the key word for the coming year, because the shadow of the coronavirus will still loom large over the UK’s economy, and it looks likely to be a factor in employment and government policy during 2021 and beyond. Yes, the roll out of the vaccine is great for building long-term optimism but it is unlikely to ensure that the UK can return to business as usual until well into the year. A victory of sorts, perhaps?
Predictions from government officials vary but the smart money is on summer being the time when the handshake, rather than the elbow bump, could return as the polite form of business greeting, and it’s when construction sites should return to a resemblance of pre-virus normality. In the interim, the considerable additional costs of Covid compliance, including increased man hours on site, and elevated transportation costs, caused by the need to use more vehicles to socially distance workers in transit, will continue to be borne by contractors: so far, without government support.
Despite Covid-19 driving a coach and horses through government fiscal policy and decimating some industries in the UK, the construction sector fared rather well in 2020, and although the post-Covid landscape will be approached with some uncertainty, it looks likely that new developments will continue apace. Indeed, our own enquiries register suggests that investment won’t slow in 2021, and those enquiries are for major residential developments already in the pipeline prior to Boris Johnson’s announcement that the government would build the UK out of recession; therefore one could expect that there’s even more to come.
The continuing regeneration of Manchester, Europe’s development hotspot, where we completed recently our 10,000th residential apartment, in a little over five years, shows no signs of having the brakes applied. If this is a barometer of post-Covid UK, then it should encourage us all. So look out for Manchester, Salford and Liverpool continuing to lead the way in development terms.
The confidence of developers suggests that city centres will continue to be the lifestyle location of choice for the under 30s, and my own prediction is that, despite working patterns changing during lockdowns 1&2, where some employees became accustomed to working from home, businesses, by and large, will welcome back their workforces in significant numbers, meaning that city centres will get back their atmosphere, and businesses reliant upon daytime trade will once again flourish.
Levelling up the North
The Government’s pledge to level-up the North, to generate investment and increase employment opportunities, should see more large scale developments being given the nod, and consequently fuel the need for more qualified trades’ people. If this caused education policy to give equal focus to vocational and academic subjects, then that shift in 2021 would be welcomed, particularly if construction is to be the driver for the UK economy, and also the beneficiary of increasing numbers of young people taking up apprenticeships. The alternative could be longer term skills shortages, just as the industry needs to gear up for the government’s Green Industrial Revolution.
As head of a northern headquartered business, I am pleased with the rebalancing of economies north vs south and I believe that in 2021, the scale of development in the north, particularly the North West, will continue to outpace London and the south of England. Aside from major infrastructure expenditure, funded by taxpayers, the construction sector will rely heavily on private investment to fuel the ongoing residential boom in inner city areas.
The government’s 10-point plan for a Green Industrial Revolution was much anticipated, yet 2021 is unlikely to see it ripping up any trees (metaphorically speaking) to such a degree that we will see huge changes in the way we operate or in the type of working practices we adopt. As an industry, construction is already an environmentally conscious sector, and has always, by default, been an early adopter of new green technology, as and when building regulations have changed; therefore don’t expect sites to ‘go greener’ in 2021.
As an example, the residential high-rise developments in which we are engaged in Manchester are highly insulated, airtight buildings, which minimise the amount of energy needed to heat them; therefore don’t expect 2021 to see any drive to make them more carbon-efficient, because they are probably as good as it gets already.
I’d suggest that the most visible sign of adoption of the 10-point plan in the coming year is likely to manifest itself through the installation of increasing numbers of electric vehicle charging points in parking areas of new build residential and commercial developments. I can even see plans for developments already under construction being changed mid-build, to accommodate the need to support the drive towards all electric vehicles, particularly if there is government support for the additional development costs involved.
Further down the line, beyond 2021, perhaps we’ll see metered charging in the private sector with induction chargers being the next step in the charging of electric vehicle batteries. The capability is already out there, and let’s face it this is not a new principle, because this was proposed by Nikola Tesla as far back as the end of the 19th century, albeit without an electric car in mind!
Coming Back Post-Covid
Some industries have been hit harder than others by Covid-19. Some may find it harder to bounce back than others, particularly in the hospitality sector. However, expect a bounce from the travel and tourism industry in 2021, particularly in the hotels’ sector, where more new developments will be given the green light as confidence returns to the market, and tourism dusts itself off after taking major blows during the pandemic.
Contracts were still being signed during lockdown for hotel developments, set to break ground in 2021, which indicates that the sector held its nerve. Indeed, at Ameon we are due on site in early 2021 on two hotel contracts at Manchester Airport for major hotel groups, and I hear similar stories across the industry, so there’s every chance that the direction of travel for the construction industry is upward during 2021.
Once we’re all vaccinated, and able to wave our vaccination passports, we also might be able to plot our own direction of travel to somewhere warm again. And who knows…by the start of 2022, we may be in a position to channel a little Churchillian spirit with a capital ‘V’, knowing that we’ve beaten Covid for good.
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