Shortages of materials and staff hold back the construction recovery in September

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September data revealed another growth slowdown in the construction sector, with output volumes rising to the smallest extent for eight months. This partly reflected softer demand conditions than the peak seen earlier in the summer. Survey respondents also cited disruptions on site from unavailable transport, a severe lack of materials and continued staff shortages.

A rapid drop in sub-contractor availability was reported in September. Imbalanced demand and supply contributed to the steepest rise in sub-contractor charges since the survey began in April 1997. Some firms noted that the unpredictable pricing environment had slowed clients’ decision-making on new orders and led to delays with contract awards.

At 52.6 in September, down from 55.2 in August, the headline seasonally adjusted IHS Markit/CIPS UK Construction PMI Total Activity Index dropped further below the 24-year high seen in June (66.3). The latest reading signalled only a moderate expansion of total construction output and the weakest speed of recovery for eight months. Reports from survey respondents linked the slowdown to a combination of supply chain issues and softer demand.

All three broad categories of construction activity saw a loss of momentum in September, with the biggest slowdown seen in
civil engineering (51.0, down from 54.8 in August).

House building also decelerated in September, with the latest expansion the weakest since the recovery began in June 2020 (52.8). This left the commercial segment (53.6) as the best-performing category during September. Resilience in this sub-sector reflected a continued boost to order books from the reopening of the UK economy.

Construction companies recorded a moderate increase in new work during September, with the rate of growth easing sharply to its weakest since the start of 2021. The slowdown was linked to hesitancy among clients and less favourable demand conditions.

September data indicated another strong rise in employment numbers across the construction sector, driven by greater workloads and stretched business capacity. However, the latest rise in staffing levels was the least marked since April, which partly reflected long wait times to fill vacancies.

A lack of sub-contractor availability added to the squeeze on labour supply in September. Shortages of sub-contractors also led to additional cost pressures, with rates charged for sub-contracted work increasing at a survey-record pace.

Purchase prices increased rapidly in September, although the rate of inflation eased further from June’s all-time peak. Around 78% of the survey panel reported a rise in their cost burdens, which was mostly linked to supply shortages and transport surcharges.
Meanwhile, the latest survey illustrated that construction firms remained highly upbeat about the business outlook. Just over half (51%) forecast rising output, while only 8% anticipate a decline. However, the degree of confidence was weaker than
August amid some concerns that the supply chain crisis will hinder growth.

It’s a record year!

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Construction marketing has bounced back from the pandemic, with a record number of entries to the Construction marketing Awards 2021.

Entry numbers have shot up around 30% from 2020, pushing the 2021 tally to the highest ever. Judging has now started, and luckily we expanded the judging panel with a number of new members this year, or people would have been seriously over worked.

We’re delighted to have had so many, it shows the resilience of our community, and we’re now working our way through hundreds of entries towards the announcement of the shortlist sometime around October 11th. Watch this space!

Extra time to complete entries for CMA21

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Good news for those beavering away on entries for the Construction Marketing Awards 2021!

We will be allowing extra time to complete entries which have been started by the closing deadline. So as long as you have begun your entry – given it a name, chosen the category, and completed the basic contact fields – by 23.59 on Friday September 17, you will be allowed until 5pm on Wednesday September 22 to complete all the fields, upload your supplementary files, and press submit.

That’s five extra days to submit, but ONLY if you have begun your entry by the original deadline.

So if you plan to submit an entry, get it started now, and give yourself the extra time.

Construction activity slows

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Construction activity slowed in August, as materials availability affected work volumes.

The latest IHS Markit/CIPS Purchasing Managers’ Index posted a score of 55.2 in August 2021, down from 58.7 in July. A reading above 50 indicates work levels are still increasing. August’s reading was the lowest since February.

New work that had been delayed due to Brexit and the pandemic was started during the month, but survey respondents said clients’ confidence had been dampened by limited material availability and inflation volatility. Two-thirds of respondents said delivery times increased in August compared with July. Hiring also slowed to its lowest level in four months, as firms struggled to meet rising labour costs.

Overall cost inflation increased in August and hit its second-highest level on record, surpassed only by the rate seen in June.

Civil engineering saw the slowest growth for the fourth month in a row, scoring 54.8. Commercial construction was the best-performing category, at 56, although this was the slowest rate of expansion for six months. Housebuilding recorded a rating of 55.

Despite the overall slowdown in growth and ongoing cost inflation, construction companies remained “highly upbeat” about their prospects for the coming 12 months, according to the survey. The positive sentiment was underpinned by expectations of more new work hitting the market in the months ahead.

Entry deadline approaching

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The entry deadline for the Construction Marketing Awards 2021 is on September 17th.

Many of you have started your entries already, but if you haven’t, now is definitely the time to get moving! Remember, the only way to guarantee you wont win, is not to enter! Give your self a chance of lifting one of our prestigious trophies, and get going on your entry now!

Awards update – plans for the gala dinner

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As things stand, with the restrictions on live events lifted, we will be able to stage a gala dinner for 2021. Last year we ran an online celebration, which allowed us to present the awards, but didn’t allow the fabulous networking opportunity, and best party of the year, that is our gala dinner presentation to happen.

This year, we plan the presentation on December 2. We expect to welcome hundreds of guests to the Hilton London Bankside for an evening of fun and celebration.

Get even more from your content marketing

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As our webinar on June 8, 2021, discussed, content marketing is not always a well understood tool. But it’s so much more than posting a few blogs. And, as the BarbourABI team explained, you can use a few simple techniques to get a lot more from your efforts.

Kate Perrin told us about Gary Vee – entrepreneur Gary Vaynerchuk who created the “pillar content” model content strategy. She explained how she saw how it could work for B2B, took the parts applicable to the BarbourABI business model, and managed to get got better reach without scaling resources.

Simply put, you use a piece of “pillar content”, usually a long-form article of video, then create small pieces of “micro” content by using extracts. This gives you many more points of impact for the same content creatiion effort.

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Marketing, Sales, or Schmarketing?

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Our webinar hosted jointly with Insynth focussed on using data to guide your marketing strategy explored how construction companies can approach the collection, analysis and use of data in marketing.

We talked about how many construction companies struggle with outdated legacy systems storing incomplete or poor quality information. The separation between sales and marketing – both in data terms, and more spiritually – came in for some discussion. One speaker, Dan Tyre of Hubspot, said the winning approach was to do away with the difference – not sales, not marketing, but Schmarketing.

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