It can be hard to get the measure of the UK construction sector these days. The Office for National Statistics (ONS) latest report, showing figures for May, resulted in a flurry of emails to the TTJ office.
The message from the Federation of Master Builders was that “the new PM must intervene as construction output flatlines”, while Blane Perrotton, managing director of national property consultancy and surveyors Naismith declared that “months of extreme volatility have left the construction industry as punch drunk as a boxer, tottering three steps forward and then two steps back”.
Clive Docwra, managing director of construction consultancy and design agency McBain struck a more positive note, however.
“The construction industry will give a cautious welcome to these figures as they show a moderate increase in output in May after two successive falls in March and April,” he said. “We expected a much bleaker picture given the continuing fog surrounding Brexit and pessimistic predictions of a sluggish economy.
“Growth of 2.2% in private commercial new work and 8.4% in public new housing was also better than forecast.”
Clearly one’s view of the construction landscape depends very much upon where one is standing. And Andrew Carpenter, chief executive of the Structural Timber Association, is happy with the outlook.
Construction of timber buildings in 2018 is set to top 60,000 units, up from around 52,000 in 2016 and, he said, according to MTW Research’s statistics, the upward trajectory is set to continue.
“Sustained demand for new housing, coupled with advances in timber frame technologies are set to stimulate growth in the timber frame market in the medium to longer term,” said MTW’s James Taylor. “Identifying a number of positive factors, the report forecasts sales growth of more than 30% by 2020, underlining healthy opportunities and a promising future for the timber frame market.”
Growth is still very much attributed to the need to address the housing shortage but it’s not the only reason.
“Speed of build is still a big factor, as is the skills shortage and the acknowledgment now that offsite construction is a necessity,” said Mr Carpenter.
“The other factor, which is very much back in play now, is the environmental agenda. We only have to look at what is happening generally – the Extinction Rebellion movement and Theresa May’s parting gift as PM of the 2050 carbon neutral target.
“And,” he continued, “on May 2 the government announced an ambition to increase timber frame’s market share from 30% to 40% by 2025, based on its environmental credentials. There are good reasons for optimism.”
Housing and “anything with beds” – student accommodation, hotels and care homes – is still keeping the construction sector buoyant and in terms of structural timber builds there is a fairly even split between national developers, self-builders and housing associations.
“We’re seeing the big developers taking more and more interest in timber frame,” said Mr Carpenter. “For example, Barratt Developments bought Oregon Timber Frame last month and just last year Countryside Properties bought Westleigh, which owns Westframe.”
Over the last three years Barratt has built around 5,500 homes using timber frame construction and uses it in the majority of residential properties it builds in Scotland. It is increasing its use in England and Wales and has undertaken to build at least 20% of its homes using an element of offsite construction, including timber frame, by 2020.
Meanwhile, Countryside Properties’ new modular timber frame factory in Warrington, which started full production in March, is on course to deliver 500 offsite homes this year. Capacity is 1,500 per year.
And Berkeley Homes is building a new modular housebuilding factory in Gravesham in Kent, where production is due to start in the spring of 2020.
“We have now seen quite a significant increase in social housing and you only have to look at the recent agreement between Stewart Milne Timber Systems and L&Q to see the direction of travel for the affordable housing market (TTJ March, 2019).”
The partnership will see Stewart Milne Timber Systems deliver closed panel timber frame for more than 1,500 homes for L&Q, one of the UK’s leading housing associations. The deal forms a key part of L&Q’s Modern Methods of Construction (MMC) strategy, which will see all of its new build homes delivered with some form of MMC by 2025, with an entirely offsite manufactured home completed by 2028.
In terms of geographical coverage, timber frame is still very dominant in Scotland, accounting for about 80% of new build, while England and Wales are a long way behind on around 20% each. However, there is an aspiration to “up the ante” in England and Wales, said Mr Carpenter.
“The Welsh government in particular has identified the Scottish model as something they would like to emulate,” he said.
The message the STA is giving to government is that the structural timber sector has capacity to spare to help plug the housing shortage.
“Two years ago we said that if we were given the pipeline we could probably get up to manufacturing 100,000 units and I don’t think that has changed. It would be fairly quickly achievable by adding shifts. And given a long-term commitment [by government], with investment by our members we could take that to 150,000 units.”
The STA membership comprises 80% timber frame manufacturers, 15% SIPs and 5% cross-laminated timber (CLT) and while CLT projects continue to be the headline grabbers, traditional timber frame is still by far “the rump of the industry”.
“Housing remains the substantive pipeline and this is really timber frame and SIPs territory,” said Mr Carpenter. “More people are looking at CLT but the whole market is growing substantially, so I don’t see those ratios changing.”
As for technological developments, he said innovation is driven by clients’ needs. Many STA members are looking to do more in the factory in terms of installing insulation, windows and doors but when it comes to BIM, only a few timber frame and SIPs manufacturers are embracing it because it isn’t on their customers’ wish lists. Conversely, pretty much all the CLT industry has adopted BIM because the part of the industry in which they work requires digitalisation.
One thing that does change at unwelcome speed is the political landscape. The Ministry of Housing, Communities and Local Government (MHCLG) has seen a number of housing ministers pass through its revolving doors over the last few years and at the time of writing, the new prime minister Boris Johnson had just announced another changing of the guard, with Robert Jenrick appointed as secretary of state for housing and communities.
“The speed of change of both the housing minister and the construction minister is a real disappointment,” said Mr Carpenter. “Having said that, behind Brexit, housing is the number one issue, whichever political party you speak to. Add to that the fact that offsite solutions are accepted across the board as a major solution to deliver the additional houses we need and I think we are in a very good place at the moment.”
He added that he had recently been in dialogue with the MHCLG and the Department for Business, Energy and Industrial Strategy (BEIS) regarding the government’s ambition to increase timber frame share to 40% and noted the fact that construction is now acknowledged as one of the four key sectors in the UK and is under the government’s microscope. (The other sectors are services, production and agriculture).
The aforementioned Brexit may have affected the ability of civil servants to carry out work and changes to building regulations may have been delayed but the construction sector has not lost its focus, said Mr Carpenter.
“The Construction Innovation Hub has a significant amount of funding to look at transforming the UK construction industry and the Construction Industry Council has been created. This is a combination of government and industry [the STA is a member] and that is driving the change agenda. Obviously housing is an important part of that.”
He added that the post-Grenfell Hackitt Review is also having a tremendous effect on changing the culture of the industry.
“Post Hackitt is all about quality and compliance and we are already onto it. We are ahead of the curve and are putting more emphasis on our STA Assure scheme.
“This has been endorsed by the NHBC and applauded by other groups within the industry. We are going to continue to drive quality and compliance so that stakeholders know they can use structural timber systems with confidence.”
