Thursday, 7 July 2011

Construction booming offshore but gloom in UK

Construction is booming in the BRICs - but there's no good news here in the UK. A decade ago or so the specialist construction support partnerships - quantity surveyors, CDM planners, project managers, construction law specialists and the like - began to agglomerate into multi-skilled LLPs that could offer clients a whole raft of skills with one appointment, and the old structures, in which the specialist partners were personally and individually liable, disappeared. I can't think when last I saw a site board with the old purple RICS lion and the legend 'Quantity Surveyors'. 2008 hit these firms hard in the UK - most froze salaries and laid off staff, and many of the bigger ones started hoarding cash. Lots of cash. 

Well, now they've started spending - but not in the UK. There has recently been a flurry of acquisitions and mergers and investments in similar firms offshore - not in the Gulf (a spent force) but in the BRICs. This is not however good news for UK construction support professionals. With university education and booming middle classes, they can recruit locally all the talent they need at a fraction of the cost of transferring a UK professional out. First class Quantity Surveyors from the Mumbai office can service a construction project in Guangzhou on salaries of £10k. 

And of course there's increasing nervousness in the UK offices of such firms; only immigration controls prevent those same Mumbai-based QSs from servicing the live construction projects in the UK. It's all part of the rebalancing of the economy away from services and back to manufacturing; just as we're losing our competitive advantage in construction support, those same growing middle classes in the BRICs have created a new consumer market for quality and niche goods. Exports of Scotch are a good indicator. Forget the value of exports - as the £ devalues, the value will increase - but look instead at volume. Although this seems steady, with no dramatic increase, something fundamental is happening. Exports to the US, France and Germany, traditional stalwarts, have nosedived. But exports to Russia are up 60%, India up 50% and China up 20%. 

So here's a message to the gloomy burghers of Merthyr Tydfil; stop whinging and pestering for handouts, and start making stuff that a 30-something professional in Rio wants to buy as a lifestyle defining product. 


Barnacle Bill said...

There is an offshore boom closer to home in which foreign firms seem to be taking the lion's share of the work.
Namely sticking all these windmills up all around our shores.

Gallovidian said...

And all the while India and China colonize Africa with not a chirp from the MSM.

And they ain't going there with a Bible in their hands.

Fasteners said...

Yup it seems that a lot of construction work on housing in the UK has come to a stand still! In Maidstone, they had stopped a number of builds a few months back, but some seem to be starting again now, so it might be worth keeping an eye on it all to see if the construction trade in the UK is on its way back up!