G&T hosts Construction Update: The Impact of COVID-19

Craig Young, Project Director of Hub South West opened the webinar by highlighting the need for key market data and robust advice during these unprecedented times. He then passed over to G&T Partners, David Logue and Gordon Ritchie who shared our recently published Market Update and Tender Price Indicators in addition to local market intelligence from the Fraser Allander Institute Economic Commentary report and the Scottish Government Draft Infrastructure Plan.

Participants were encouraged to read The Scottish Government's Draft Infrastructure Investment Plan. Public sector bodies are being encouraged to determine future need, focus on maximising the use of existing assets and repurpose and co-locate facilities before new build is considered. A routemap out of the recession is within the Scottish Government's key themes of transitioning to net zero carbon, delivering inclusive economic growth and building resilient and sustainable places. David drew attention to the Scottish Government’s pipeline as a key opportunity for the construction sector.

Detail was provided by Gordon Ritchie on the impact of the current recession on materials costs, trades costs and our Tender Price Indices.

Key Data

• G&T’s TPI shows negative inflation expected until 2022 with a gradual rise thereafter across the UK, at a Scottish level inflation in 2024 is marginally less than the level shown at the beginning of 2020.

• The business impact of COVID-19 from the ONS showed payment times being affected and 9.5% of surveyed construction firms stating that their operating costs are currently exceeding their turnover.

• A ‘No-Deal Brexit’ means that we must work hard to retain EU staff and be mindful of the likely impact on building regulations, qualifications and apprenticeships.

• The Construction Leadership Forum (CLF) issued a recovery plan which provides interesting statistics on the sector. The core message focussed on SME’s, who at the heart of our sector must be treated fairly with an effort to keep payment times to a minimum.

• The drive to net zero carbon is at the fore of the Scottish Government's agenda and their intention is absolute. It does impact on design and construction costs and as a sector we need to prioritise this.

Positive feedback was received from a number of the participants, with Craig Young of Hub South West commenting: "Covid, Brexit and the normal volatility of inflation on our minds at present, attempting to understand how these factors are likely to impact on project cost, affordability and deliverability is a key concern for the Participants of Hub SW and our industry as a whole. The G&T webinar concisely considered all these matters and provided insightful views which informs better risk management and helps equip us to guard our clients, projects and supply chain."