Regional contractors are set for a renaissance as majors turn away from smaller projects, with markets in centres outside the capital emerging as hotspots.
According to Barbour ABI and the Construction Products Association, construction activity is set to spread out across the UK – with a number of new regional hotspots ready to emerge over the next six to nine months.
In 2016 £2bn worth of contracts were awarded in Birmingham – an increase of 107% from the year before – with no signs of this cooling.
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Other hotspots include the Scottish Borders and Manchester, as construction work spreads out across the country. Regional contractors have also been reporting an increase in work, as well as stronger margins.
Mark Beard, chairman of regional contractor Beard, says that customers are increasingly opting for regional contractors, in part because of the higher level of care that they deliver – something that isn’t always apparent with the national players. Beard believes that this higher level of care is what often leads to long-term, mutually beneficial relationships.
“Running a medium-sized business with one’s name above the door means one’s own personal reputation is at stake on every project. This is a key driver of excellence,” he says. “Additionally, I believe staff in regional contractors have a greater vested interest in making a success of local projects, where invariably they have a strong personal connection with the project. At Beard, our strong focus on teamwork and resolving problems is particularly well received by our customers”
Beard says that the challenge for all contractors large and small is to do the basics really well, in particular ensuring a strong focus on quality at every stage of the project, but within an organisation which is continually looking to improve and utilise the best modern technology available within our industry. Beard feels regional contractors are ideally placed to embrace both.
“A few years ago, it was said that there was no room for small or medium-sized companies and we all saw regional companies merging and going under. Those who have survived have flourished,” he continues.
This point is echoed by Rob Hooker, director at Poole-based Greendale Construction: “We now have less competition compared to five years ago. During the recession big companies were taking on all work, which squeezed middle-sized companies. While the nationals were hoovering up lots of smaller projects during the recession, they have now pulled back and companies like us are reaping the benefits.”
Hooker agrees that it is the more personal approach that has seen his company and similar flourish over over the last year: “We’re a £15m turnover company and work within a 100-mile radius of Poole. We have the personal relationships with the supply chain local workforce and local knowledge that big companies want these days. This really counts for something.”
Michael Dell, Barbour ABI’s lead economist, says: “London’s prominence as a construction growth location is lessening. The main locations for contracts awarded in 2016 (mostly due to start in 2017) by value had two out of the top ten in London compared to six out of the top ten in the previous year.”
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