Much like many leaders within the building materials and construction fields, I get to speak with many influential people and read a large amount around our industry - much of which provides conflicting viewpoints on what is likely to happen come April.
This has lead me to stashing away numerous articles for later consumption on the subject. So what are some of the key themes rising from the above.
The bottom line is no one truly knows; but I appreciate this is less than helpful!
And so, in starting this off on a positive, latest results from the IHS Markit / CIPS UK Construction Total Activity Index has highlighted that job creation in the sector is at its highest since December 2015. Market confidence has also grown from its near six year low in October (its highest for three months). With resi largely propping up figures over the past couple of years, the worrying noise around its sluggish, even contracting performance had set pulses racing. This regained its position as the fastest area of growth in November.
Last month the Construction Products Associations latest state of trade survey revealed product sales increased for the third quarter. Key figures include 27% of heavy side manufacturers and the same figure among light side manufacturers witnessing increased orders. Furthermore 18% and 43% respectively envisage a further rise in the fourth quarter and 75% of heavy side firms reporting an increase in wages (I appreciate this puts further stains on margins).
So how much of these figures can be attributed to stock piling by those further on in the supply chain? Clearly there is nervousness among the tier ones / twos, with the UK industry relying on £10bn (c.16%) of materials being imported. With the threat of a no deal on the cards they have been left with little choice in order to complete projects on time and to budget.
To put this into perspective, it has been calculated by the Department of Business, Innovation & Skills that housebuilders brought in £82m of bricks, £809m of sawn wood and £109m of aluminum fenestration products last year. According to the Federation of Master Builders, smaller firms have already witnessed a 22% increase in buying in Spanish slate (although why they're not plumping for a certain welsh equivalent is beyond me) and 20% on imported timber.
Coupled with this, the prospect of paying VAT up front if we do end up with a no deal situation does nothing for constricting margins.
But what does this all mean to confidence? Well, in last months Builders Merchant News I read that just 21% of respondents to a RSM survey feel a no deal situation would effect performance and 25% said it would have no effect. They also see the weakening pound being an attractive proposition to foreign investment - clearly a key point in the commercial project world especially. Also bear in mind that the government may have to step in to stimulate the market with more investment into the civil markets to kick start 2019.
Still confused? One thing I have learnt this year and in writing this is, yep, no one really knows what is going to happen. It was very interesting to digest all the articles though! Stiff upper lip UK.
There is a real fear now of business grinding to a halt. As Osborne chief executive Andy Steele says: “You can’t complete a building without key elements.” With fewer than 120 days until we leave the EU and any potential deal far from a sure thing, many firms are still struggling to understand the possible ramifications of Brexit through the supply chain. So, what can the different parts of the industry do to be as prepared as they can be?