31 Mar 2017
Time will tell how a post-Brexit deal will affect investment decisions and impact UK construction output, but as Article 50 is invoked, national property and construction consultancy Wakemans says rising costs are a particular concern.
Wakemans director Dean Watson says: “Construction prices, rose throughout 2016 and with government indices reporting that input costs for goods bought and sold by UK manufacturers are increasing faster than at any time since 2008, we could see more rises in construction prices.”
Wakemans sees building materials as being another key driver of rising prices. Between the final quarter of 2016 and the first quarter of this year the average cost of building materials rose by 2.5%, which is equivalent to 10% on an annualised basis. Imports will be affected by the weaker pound, with metal prices expected to show the biggest increase.
The devaluation of sterling is already pushing up prices in the wider economy and prolonged currency weakness makes it inevitable that construction costs will rise in accordance with higher rates of inflation.
Meanwhile, further pressure on the supply chain is expected to come from labour rates. Wages rise annually and are impacted by the ongoing skills shortage. The availability of migrant labour is a key concern, while wage increases in the construction industry would also be fuelled by higher inflation.
The impact of greater economic uncertainty should not be underestimated. Any reduction in construction industry output will very likely fuel demand for tender price adjustments, where prices may remain static, or at least rise more slowly, to maintain a competitive edge.
Dean Watson adds: “Against this backdrop of rising construction costs we believe that in the coming 12 to 18 months it’s more important than ever for builders, developers and owners to stay flexible about project procurement, finance and delivery.
“By guarding against uncertainty becoming a barrier to successful development, we should be well-placed to meet the challenges of the prevailing construction landscape post-Brexit.”
Picture: Dean Watson
Building on their continued success and strong growth in UK, Canada and the US, Automotive logistics cloud-based software specialist Car Delivery Network (CDN) has its eyes on the massive Chinese marketplace.
To roll out its market leading software products in China, CDN has formed a new Joint Venture company with Shanghai KaQu Information Technology Co. Ltd, with Owen Xie, former CEO & President of NYK Autologistics in China, at the helm.
The new company, KAQU Delivery Network (KDN), will market electronic real-time OEM vehicle delivery tracking, damage reporting and delivery sign-off, along with other ePOD capabilities for carriers using CDN’s vinDELIVER application, which is currently used for approximately 17% (or one in every 6) new cars delivered in the US.
KDN will also offer customers CDN’s vinDISPATCH application, which matches demand with availability in real time, allowing OEMs to identify capacity wherever and whenever required, and drives up utilisation of trucks for carriers registered on the system.
KDN has already secured its first customer in China, with more than 500 trucks in operation handling a million units. Going forward, the company will be targeting a wide range of companies, from giant carriers to individual small fleet owners, and Owen Xie, Chairman & CEO of Kaqu Delivery Network, is confident of success.
“We expect Electronic Proof of Delivery (ePOD) and the newly introduced vinDISPATCH product to have strong appeal for our customers; our software ensures smooth flow of information and efficient physical delivery, reducing time and cost, therefore confidently predict a minimum of 40% market share for the future,” he said.
Mike Thorby, Chief Technical Officer at CDN, added, “We are very excited about taking our offering into what is the largest new car market in the world. We see China facing a number of critical issues in terms of new legislation on truck dimensions and continued market growth. CDN technology will help OEMs and Contracted Carriers identify and better utilise truck capacity, as well as supporting them by monitoring the location and delivery of vehicles in the supply chain. The forming of this JV with KaQu was a perfect opportunity for CDN, given their extensive