We use cookies to track usage and preferences.

Insights

Construction Trends Post-Covid

Construction-Trends-Post-Covid-bannerl.jpg

What are key trends impacting the construction and demolition sector as we emerge from the pandemic?

This month, we are excited to resume our presence at some of the leading trade shows in the construction industry, including Demo Expo (15-16 September) and Vertikal Days (22-23 September).

After a tumultuous year and a half, the construction and demolition industry is starting to make headway towards post-pandemic recovery. A recent Paragon survey revealed that 50% of businesses in the construction industry are now seeing their turnover match or exceed pre-pandemic levels, which is slightly lower than the cross-industry average of 54% but nonetheless promising.

Our survey also showed that two thirds of businesses in the sector experienced cashflow issues during the pandemic - this is against a cross-industry average of 58%. Loss of profit and late payments were the two leading reasons for this. In the short term, stability and implementing a post-pandemic business strategy are the main priorities for businesses as they look to the future.

There are a range of opportunities and emerging trends in the industry that construction SMEs can consider as they make plans for their future.

The Recovery Loan Scheme

Paragon is an accredited lender for the UK Government's Recovery Loan Scheme (RLS) and we are already seeing how the scheme is supporting our customers' funding needs and helping to power their recovery.

One of the biggest benefits of RLS is that it gives lenders the opportunity to lend against innovative assets that are either green or very digitally advanced but aren't necessarily 'tried and tested'. For this reason, the scheme can be used to power the construction industry forward as it begins to emerge from the pandemic by allowing access to funding on a broader range of assets than before.

Diesel tax-relief removal

The change in legislation removing tax relief on diesel is likely to trigger a spike in demand for electric or alternatively fuelled building and demolition equipment.

In March last year, the Chancellor announced the end of the diesel rebate for the construction industry, which will be taking effect from April 2022. The Civil Engineering and Contractors Association estimated that this could cost the industry an extra £500 million per year, so it's no surprise that manufacturers are turning to electric equipment solutions in order to mitigate this, including electric or alternatively fuelled diggers and excavators.

Innovation in intelligent technology

We are seeing rapid development in this field, with machines being fitted with increasingly sophisticated tech, from GPS to 3D lasers. This integration of hardware and software solutions is not only improving health and safety standards and risk mitigation but is also improving productivity, helping prevent cost overruns, and aiding the bridging of staff shortages.

On-site recycling equipment

There has been a steady increase in requests for funding for on-site recycling equipment. Recycling has always been a vital part of demolition industry as all materials end up crushed, processed and re-used. Most aggregates and other materials on building sites are reclaimed.

We have noted an uptick in demand for funding for equipment such as skip lorries and roll-on containers, which indicates that recycling is becoming a growing focus within the industry. With sustainability and cost-management both firm priorities for demolition, we anticipate demand for recycling equipment will only grow.

Importance of face-to-face collaboration

After such a transformative 18 months, live trade shows are finally beginning to resume. Many industry professionals have forgotten what it's like to convene at an industry event. It's important to consider what role face-to-face collaboration will have in the future of the industry.

There is no doubt that some of the changes brought on by the pandemic will be here to stay and that steps will be taken to provide more flexibility and reduce unnecessary travel. However, building relationships in person, through industry events, meetings and at trade shows, will always be invaluable in the people-driven industry that is construction as they provide a space for industry professionals to share, collaborate, network and learn.