CPA Weekly Notes Issue No. 743 FOR MEMBERS ONLY 9 December 2016
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December 12 2016 CPA News
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CPA Weekly Notes Issue No. 743 FOR MEMBERS ONLY 9 December 2016
12/12/2016
Top News
The CPA was pleased to see the government has this week published a new National Infrastructure and Construction Pipeline (NPIF) setting out over £500 billion worth of planned private and public investment over this Parliament and beyond with more than 40% of the pipeline being delivered thanks to government investment. The pipeline is published by the government’s Infrastructure and Projects Authority, The new NPIF contains:
- Over £500 billion of planned investment, with over £300 billion of this to be invested by 2020/21
- The Markit/CIPS PMI for services was 55.2 in November, up from 54.5 in October. The latest reading remained above the no-change mark of 50, indicating that activity in the services sector increased. It was also the highest reading since January. Business expectations for activity levels over the next 12 months remained positive overall, but weakened to the lowest reading since July.
- According to the British Retail Consortium, UK retail sales in November increased 0.6% on a like-for-like basis from November 2015, when they had decreased 0.4% from the preceding year. On a total basis, sales rose 1.3%, against a 0.7% increase in November 2015. The growth in retail sales was driven by food sales and double-digit growth in online retail sales.
- Over 720 projects and programmes across transport, housing and digital to fire up the nation’s infrastructure
- Around 20 new schemes have been added to the pipeline since March 2016, including the Oxford to Cambridge Expressway.
The CPA believes that, given the importance of the infrastructure sector in supporting improved productivity, skills and resource planning, this new NPIF will provide construction product manufacturers and distributors more clarity and certainty about essential, long-term investment.
Economy
Economy
- According to the ONS, industrial production in October decreased 1.3% on a monthly basis and was 1.1% lower compared to a year earlier. Manufacturing output decreased 0.9% month-on-month in October, reflecting a broad-based fall in activity. Compared to a year earlier, manufacturing output was 0.4% lower. The largest downward contribution came from pharmaceuticals.
- In October, the UK’s deficit on trade in goods and services was £2.0 billion, narrowing from £5.8 billion in September and £4.1 billion in October 2015, according to the ONS. Exports of goods increased 16.5% year-on-year to £26.8 billion, whilst imports increased 5.6% to £36.5 billion, leaving a goods deficit of £9.7 billion.
Housing
- According to Halifax, UK house prices increased 6.0% year-on-year in November and were 0.2% higher than in October. The average UK house price in October was £218,002. This was the first acceleration in the annual rate of house price inflation in eight months and low mortgage rates combined with an ongoing, acute shortage of properties available for sale were noted as drivers of house price growth going forward.
- According to BEIS, the construction material price index for all work rose 0.9% month-on-month in October and increased 2.6% from a year earlier. Construction materials prices for new housing, repair and maintenance and other new work rose 3.1%, 3.5% and 2.2%, respectively in the year to October. In the 12 months to October, the materials reporting the largest price increases were imported sawn or planed wood, fabricated structural steel and sanitaryware.
- The ONS has published construction output data for October 2016. Overall, output fell 0.6% compared to September but rose 0.7% year-on-year. The initial fall in output recorded in Q2 was revised up from a 0.1% quarter-on-quarter decline to a 0.5% increase. The initial 1.1% fall recorded in Q3 was revised up 0.3 percentage points to -0.8%. Changes across the sectors in monthly data are:
Construction
- All new work decreased 0.9% compared to September, but increased 2.9% compared to October 2015
- Private housing output increased 2.5% month-on-month and 13.9% on year-on-year
- Public housing output decreased 3.0% on a monthly basis but rose 4.2% on an annual basis
- Public non-housing output decreased 3.1% on a monthly basis and rose 1.3% on a yearly basis
- Infrastructure output fell 4.1% compared to September and 11.3% from October 2015
- Output in the private commercial sector fell 1.4% on a monthly basis but rose 5.4% year-on-year
- Industrial output increased 1.8% compared to September and fell 6.8% compared to October 2015
- Public housing repair, maintenance and improvement (RM&I) output decreased 1.3% on a monthly basis and 11.7% on an annual basis
- Private housing RM&I fell 1.5% month-on-month and 2.4% year-on-year
- Non-housing R&M output increased 1.6% on a monthly basis but fell 1.1% on an annual basis
- In addition, the ONS published construction new orders data for 2016 Q3. Overall, orders decreased 2.4% compared to Q2 but were 5.5% higher compared to 2015 Q3. Changes across sectors are as follows:
- Public housing orders decreased 0.7% compared to Q2 and rose 64.4% compared to 2015 Q3
- Private housing orders increased on a quarterly basis and yearly basis by 0.2% and 17.8%, respectively
- Public non-housing orders fell on a quarterly basis by 24.8% and 9.1% on an annual basis
- Infrastructure orders increased 22.4% compared to Q2 but were flat compared to 2015 Q3
- Commercial orders decreased 9.9% on a quarterly basis and rose 6.5% on an annual basis
- Industrial orders increased 4.4% quarter-on-quarter but decreased 8.6% compared to a year earlier
For further information contact rebecca.larkin@constructionproducts.org.uk.
Association Activities
Flooding workshop 2
Our next flooding workshop will take place on the 12th December in The Building Centre’s Vincent Suite 1.30-5.00pm. We are to cover the post review progress and developments focusing in particular on products and the product arena. Volunteers to present and showcase products are welcome. We will also look at feedback on the review so far. Update on progress on actions. For more information, please contact julie.mills@constructionproducts.org.uk.
Draft CPA Guide to EU Regulations and Directives
Following the EU Referendum vote in June 2016, the CPA has drafted a guide to help members begin to understand the legal landscape of EU legislation relevant to construction products manufacturers and distributors. This guide (a working draft) outlines two main subjects:
- The process of EU Legislation becoming UK law, including the types of legislation and their impact on the UK; and
- The regulations and directives affecting the UK, including climate change, emissions, energy use, H&S, and products.
Questions can be directed to either Duncan King, Technical Manager, Duncan.King@constructionproducts.org.uk, or Jeff May, Head of External Affairs, Jeff.May@constructionproducts.org.uk.. Apologies the web link listed in last week’s Weekly Notes was broken, a working link to view the document can be found here.
CPA report: The Future for Construction Product Manufacturing
CPA recently published a report which analyses how through a combination of digitalisation, automation and optimised manufacturing-led supply chains, the sector can grow 60% by 2025, assets can be delivered over 30% cheaper and 40% quicker, and the trade gap can be reduced to 50% by 2025 whilst supporting employment growth in the sector and wider economy. This report illustrates how the vision can be delivered by linking BIM (Building Information Modelling), Industry 4.0 (smart factories) and intelligent assets through optimised supply chains and a circular economy approach. To read either the executive summary or full report, please click here.
Other Areas of Interest
£60 million boost to strengthen the UK’s manufacturing base
Six new £10 million research hubs that will explore and improve new manufacturing techniques have been announced by government funded through the Engineering and Physical Sciences Research Council (EPSRC). The hubs will draw together expertise from 17 universities and 200 industrial and academic partners across fields such as targeted biological medicines, 3D printing, and composite materials. Summaries of the Hubs and further information can be found here.
Waterwise consulting on its Water Efficiency Strategy for the UK
Waterwise, an independent, not for profit organization, in collaboration with the water sector, has issued a draft “Water Efficiency Strategy” for the UK aimed at providing a guide for organisations planning to undertake water efficiency actions. They also hope that it will help shape policy and regulatory frameworks to deliver water efficiency measures that benefit society, economy and the environment. Topics covered include:
- Water and energy efficiency in homes – new rebate schemes and enhanced product labelling, large scale retrofit programmes to deliver lower water consumption, reduce household bills and cut emissions
- Water and the circular economy – tools for water and wastewater reuse, to extract the maximum value out of our use of water
- Water technology, innovation and jobs – citizen science projects, better links between academia and the water sector, an incubator for water efficient products, leading to jobs and economic growth.
- Mrs Anne Main (Con, St Albans): What definition of “sustainable” his Department uses in relation to planning, infrastructure and strategic priorities? The Ministerial response can be viewed here.
- Sir Nicholas Soames (Con, Mid Sussex): What guidance his Department has given to planning inspectors on the weight given to infrastructure issues in new developments? The Ministerial response can be viewed here.
- Craig Whittaker (Con, Calder Valley): What steps his Department is taking to support the construction industry in delivering more modern and high-quality prefabricated housing units? The Ministerial response can be viewed here.
- Rachael Maskell (Lab, York Central): Which flood defence and resilience projects are currently in (a) construction, (b) development and (c) pipeline phase? The Ministerial response can be viewed here.
The consultation closes on 31 January 2017. For more information click here.
New European Commission package on Clean Energy for All Europeans’ – the Winter Package
The European Commission has issued its 2016 Clean Energy Package (popularly known as the Winter Package) which covers a diverse range of energy topics from global leadership in renewables energies, the electricity market, a fair deal for consumers to a big focus on energy efficiency. The package, which includes a great many accompanying papers, has a nine page Annex 1: Accelerating clean energy in Buildings. This links energy efficiency with the Construction Products Regulation, waste and Building Information Modelling (BIM). Ecodesign is also included in the Communication with the Commission recommending this should be incorporated into the harmonized standards under the Construction Products Regulation. There is also indication that the Commission is considering a revision of the CPR. Clearly this is an important package for the industry and our sister organization in Brussels, Construction Products Europe, is leading on its analysis and will be engaging as the package of measures starts to unfold. The impact of BREXIT on the measures proposed in the package will be analysed by CPA as they arise. Both CPA’S Technical Committee and Sustainability Committee will take up relevant topics when appropriate. For further information contact either duncan.king@constructionproducts.org.uk or jane.thornback@constructionproducts.org.uk
BIM Level 2 explained
The BSI have released a new information pack to help industry understand BIM Level 2. Government requirements means that centrally-procured government projects must be BIM Level 2 compliant as from April 2016. This is a collaborative process requiring the creation, collation and exchange of shared 3D models supported by a range of structured data, enabling software, British standards and Publically Available Specifications. The driving force behind BIM is the government’s initiative to reduce both the capital cost of the project and its operational expenses, increased quality control and better green performance. A copy of the guide can be downloaded here.
BSI issues its draft Circular Economy Framework Standard for open consultation – BS8001
The proposed Framework Standard aims to be a guide for implementing the principles of the circular economy in organisations; it applies to any sector. The consultation will remain open until 15 January and we will have it as an agenda item on the CPA Sustainability meeting on 2nd December. Find the document here. Also, a reminder that CPA with BRE produced a detailed Knowledge Resource on Circular Economy in construction which gives lots of helpful links and thoughts on issues and challenges for embedding circular economy principles into construction. Find it easily available on the CPA website here. For further information contact jane.thornback@constructionproducts.org.uk.
Parliamentary and Government Update
Parliamentary update
Westminster weekly business
The finalised Westminster business document for the week commencing Monday, 12 December 2016 can be viewed here.
Plans, Reports, Consultations and Statements
Consultation: Heat in Buildings – The Future of Heat
BEIS is running a consultation that asks for views on options for raising domestic boiler standards. The government is also seeking evidence on the costs and benefits of wider domestic and non-domestic central heating system performance improvements. The consultation will close on 27 January 2017. For more information click here.
Consultation: Packaging waste: changing business targets for paper, steel, aluminium and wood
DEFRA want to know what you think about their plans to introduce new business targets under the Producer Responsibility Obligations (Packaging Waste) Regulations. The regulations require producers of packaging to make sure that a proportion of the packaging they handle is recovered and recycled. The proposed changes would set new targets for overall recovery and recycling between 2018 and 2020. It will also set new material specific targets for paper, steel, aluminium and wood. For further information and to respond, click here. The deadline is 06 January 2017.
SAP 2016 Consultation
On 16 November BEIS released their consultation on the proposed changes to SAP 2012. A copy of the consultation document SAP 2016 can be viewed here.This consultation closes on 31 January 2017. If anyone has any queries about this work please contact Neil Witney directly on buildingheat@beis.gov.uk.
The draft specifications for the new version of SAP and supporting technical papers are available here.A software implementation of the proposed SAP methodology has been prepared to assist consultees in understanding how the proposed changes, as and when adopted, would work in practice and can be found here.So that CPA can submit a response based on the general consensus of the membership, please can you cc duncan.king@constructionproducts.org.uk with your individual replies by Friday 20 January 2017.
Government launches review of corporate governance
The Department of Business, Energy & Industrial Strategy are currently running a public consultation seeking views from businesses, suppliers, workers and members of the public on what should be done to strengthen the UK’s corporate governance. Views are being sought on options to strengthen worker and customer voices in the boardroom, reform executive pay and build a stronger corporate governance framework for large, privately-held companies. For further information and to take part in the consultation click here.
CPA Meetings
Members of the CPA’s Industry Principals Council (IPC) hosted Mr Iain Wright MP (Labour, Hartlepool), Chairman of the Business, Energy and Industrial Strategy Committee, for a working lunch that included a wide-ranging discussion on issues impacting construction product manufacturers and distributors, including the pending industrial strategy, energy and energy efficiency policies, skills, regulations, Brexit, et al.
CPA Economics Director Professor Noble Francis briefed Lord Stunell (LibDem) on the current industry forecast and possible impacts of Brexit.
CPA Economics Director Professor Noble Francis met with civil servants at the Department for Business, Energy and Industrial Strategy to discuss building materials statistics.
Parliamentary Questions
Questions for the Department for Communities and Local Government (DCLG):
Questions for the Department for the Environment, Food & Rural Affairs (Defra):
CPA in the News
– Construct UK: Construction Products/BIM: CPA & CoBuilder Announce LEXiCON Delivery Partnership
The Construction Products Association (CPA) is leading the development and implementation of LEXiCON, the plain language approach to product data definition and exchange in the UK.
– Contract Flooring Journal: How BIM could affect flooring
The Construction Products Association has been instrumental in setting up a group for manufacturers which operates separately and may be contacted for advice. This group ‘The BIM for Manufacturers and Manufacturing (BIM4M2)’ group has a clear vision and feels that it is essential that manufacturers have a BIM content strategy.
– Money AM Shares: Marshalls confident of meeting 2016 expectations
Marshalls is confident of meeting its 2016 expectations. In a statement Marshalls said: “Looking ahead into 2017, the Board notes the modest growth levels highlighted by the recent Construction Products Association autumn forecasts.”
– Shares Magazine: Marshalls confident of meeting 2016 expectations
“Alongside this, the underlying indicators have remained positive in Marshalls’ main end markets while order intake and revenue growth remains robust and the positive cash generation reported at the Half Year has continued,” Marshalls said in a statement. “Looking ahead into 2017, the Board notes the modest growth levels highlighted by the recent Construction Products Association autumn forecasts.”
– Stock Market Wire: Marshalls is confident of meeting its 2016 expectations.
In a statement Marshalls said: “Looking ahead into 2017, the Board notes the modest growth levels highlighted by the recent Construction Products Association autumn forecasts.”
– The Telegraph: Marshalls is confident of meeting its 2016 expectations.
In a statement Marshalls said: “Looking ahead into 2017, the Board notes the modest growth levels highlighted by the recent Construction Products Association autumn forecasts.”