As some of you are aware I dabble with a bit of stand up comedy. I do the odd open mic spot in comedy clubs to ‘mixed reviews’. I do this because I wanted to take myself out of my comfort zone. Tick, I’ve succeeded more comprehensively than I could have imagined. There is nothing more terrifying than standing in front of an audience and trying deliberately to make them laugh. And the one thing that is crucial to good comedy is timing: get it wrong and you blow the gag.
The same is true of investment in your business. Get the timing wrong and you could have lost access to working capital with little return on the investment. Right now would however seem to be the perfect moment to invest, be it in the future success of your business or in your own career.
The wider economy is booming and this is reflecting in construction projects. It will take time for projects that were ‘bought’ during the recession to work through but the Construction Products Association (CPA) is reporting a 16 per cent rise in activity in the last quarter and 87 per cent of our manufacturers are anticipating rising sales in the next year.
So you’ve survived the recession and now need to make sure you manage through the recovery. Statistically this remains a dangerous time as cashflow is squeezed by increased turnover. There are other risks that result from an improvement in construction output. Material prices will rise, with the CPA again reporting a five per cent increase. Couple this with labour shortages on the horizon, with the inevitable increase in cost, and you can understand why increased activity does not necessarily immediately translate to higher margins.
All this at the point where the construction industry is facing a digital revolution. If you want to know what the London black cab drivers’ demonstration was about, it was in a word, digitisation. The advent of accurate GPS systems has wiped away the need for ‘the knowledge’. The taxi industry as we know will change and very rapidly. Digitisation will have the same impact on fit out and finishes. Anything that can be calculated will be automated and new work processes will develop.
Technologies like 3D printing will change the way we develop products, making prototyping quicker and cheaper. Digitisation will impact the whole supply chain, with the government expecting a whopping
20 per cent saving on project costs.
So with new technologies and processes do we have the right workforce to take advantage of change? Coming out of recession our pool of labour has diminished as people left the industry. We have not replaced the leavers with newly qualified staff. Couple this with the HMRC campaign on labour-only subcontactors (LOSC) and we could have a crisis on our hands. Many companies are considering returning to a PAYE model to lock in their trained and skilled workers before it is too late.
Whatever we do we must radically change the training landscape. Now is the time to develop and provide properly funded careers for our people. We should encourage all our staff to improve their skills sets on a continuing basis. This will need a change in culture where training becomes something we all understand and participate in for our own career development at both professional and, most importantly, craft level. Training should be something that develops your CV not something ‘done’ to you. Only when our people start to think of a career rather than a job will we get the cultural change that will allow us to embrace technology and the change that is inevitable in the sector.
This is a revolution and it is better to take part in one than have one done to you.
Hence the time is right to invest. To do this properly requires thinking, research and planning. This will obviously require time and that is in precious short supply when so much activity is wasted chasing payment, the single biggest value destroying activity in the industry. That is why AIS FPDC supports the new payment charter that will initially see payment terms reduced and ultimately the end of retentions.
I certainly know that many of you have retained your sense of humour through the dark years; it may be gallows humour but nevertheless timing remains everything and now is the time to bet on yourselves.
AIS FPDC chief executive