20| THE MARKET
MARKET COMMENTARY Gerard Graham
by Gerard Graham
Social housing is expected to be a growth sector in the near future…
To date, 2020 is a year that few will forget. Many construction companies have experienced their most challenging year since 2008. Most Managing Directors had to temporarily close their businesses for the first time in their lives, that’s a very difficult thing to do as it goes against the grain of what they have been striving for. Although there have been challenges, there are also opportunities ahead. Here are my thoughts on the implications of the last few months… Impact of the Pandemic: Higher premium insurances: Get ready early for a challenging renewal. Expect heightened underwriter focus on COVID-19 impact. My
advice is to commence the renewal process earlier than normal, and to seek advice from your Broker on anticipated changes. Employment contracts: Many people have been working from home and may well continue to work from home 2-3 days per week going forward. Chances are their employment contract was written based on the ‘head office’ being their place of work. This will need revisited by many employers to ensure their employees are insured to work from home. Remote working: I think at some stage a construction company is going to take the bold step to have all its staff working remotely and no longer have a head office. The staff will need to be trained on operating a paperless office and cloud computing. This will reduce their overheads as rent/rates/ utility costs/photocopier expenses etc. will no longer be required. The company will hire a meeting room
Check us out on social media www.specifymagazine.co.uk
in a business park for essential face-to-face meetings. This could make the company leaner and better positioned to undercut their competitors when tendering for work. Undoubtedly there are pros and cons with such an approach, but regardless, I think sooner rather than later we will see a company go down this road.
Opportunities:
Constructionline: Constructionline has a new section on COVID-19. Contractors should take the opportunity to update it. This will help potential clients identify who is mobilised for new contracts. Marketing: In a challenging economic market many companies make the decision to reduce their marketing budget to reduce costs. I believe this is the wrong decision. If anything, more time should be focused on marketing as now more than ever you need to be stealing a yard on your competitors to make sure your business is being presented
to the widest possible audience. Sectors: The two sectors I think there will be growth in are social housing and commercial refurbishment. I think there will be more managed service office spaces opening up to allow office workers to work in a shared business environment in proximity (5-10 miles) of their home. The growth areas will be outside of Belfast in towns where people previously would have commuted to Belfast from such as Ballymena, Dungannon, Cookstown, Newry, and Ballymoney. Staff training: Many employers have used the recent time to focus on getting their staff trained. In particular, many companies seem to have prioritised getting management staff chartered during 2020 to help compete for future public sector contracts.
Revenue:
Now is a time when contractors should maximise every income