Welcome to the 2020 FIS ‘Virtual’ AGM and conference. This is certainly a novel format and I very much hope one of a kind.

2020 has been a year of nightmare scenarios. When I addressed you last year none of us could have predicted the sinister turn that life would take. My business plans, just like yours, are in the bin and I have had to re-evaluate my aspirations for the future.

It was amongst this mayhem that the value of the FIS really crystallised. The whole team ‘stepped up’, took on the challenge and in a matter of weeks produced the Covid-19 Hub. This provided guidance on the maze of procedures that left us confused and anxious. It provided the Risk Management Toolkit and the H&S Taskforce, a group that sprang up overnight and supported by members, provided crucial guidance on site procedures.

There were daily mailshots, twice weekly webinars and most importantly of all, a friendly voice at the end of the phone when you needed moral support and one that could carry our concerns into the wider industry and economic debate – straight to the Construction Leadership Council, Civil Servants and Ministers.

The board also did their bit with weekly meetings and offers of support to members who needed it, I have never been prouder to be a part of that team.  I have also never been prouder to be part of our industry, which has demonstrated incredible resilience, whether building Nightingale hospitals or simply holding our end up in keeping at least some of the economic lights switched on.

I know what it’s like to be a small business owner, swimming in a sea of regulations. I know what it’s like to not be able to afford expensive consultants or accountants to give me regulatory or financial advice. I know what it’s like to sometimes make decisions that I don’t feel qualified to make and bear the responsibility for that. Here’s an amazing statistic for you, nearly 60% of our contractor members turn over less than £5m and in fact only 17% turnover more than £10m and we never forget that statistic. You, like me, need the advice, technical guidance and moral support more than anyone and once again FIS membership pays dividends.  It is these companies that we are targeting our new Business Risk Management Tool that is now available to download from our website.

As well as helping with the day to day, FIS keeps an eye on our future.  The Building Safety Bill will have enormous repercussions for our sector. In response Joe Cilia has collaborated with other leading bodies to produce the guide to ‘Firestopping of Service Penetrations’, a guide that gets to the heart of safety issues in our sector. Another well received publication was the ‘Safe Ingress of Plasterboard’, essential for the prevention of Musculoskeletal disorders so prevalent in our sector.

The training team, hit badly by the withdrawal of CITB funding, has under new leadership in George Swann been working to find ways to continue resourcing the leading work that we have been delivering through the Fit-Out Futures program and set a more standard framework for competence through our sector.  Again vital work.

So we move into the formal part of the day today, the AGM, I hope you have felt the benefit of being part of this amazing community.  At the heart of this, Jane Knight, our Operations Director, who last week celebrated 30 years at the FIS.  This is quite a landmark, congratulations Jane and thank-you for your immense contribution to FIS.

What will 2021 look like. That is our focus for today, building a phoenix from the flames of a pandemic. In January we have Brexit and the repercussions for labour shortages and product certification, The Building Safety Bill, Reverse Charge VAT and that’s just the first quarter. Our headline topics cover some of the biggest issues and discuss how we foster healthy relationships in our supply chain, replace mistrust and combat with cooperation and collaboration and give our sector the best chance of succeeding, with of course the FIS backing us up.   Because above all else,

IT’S ABOUT COMMUNITY… TOGETHER WE ARE STRONGER.

Members can read the minutes of the 2020 Annual General Meeting here.

New data from the FIS indicates that 30% of members are already experiencing labour shortages and 62.5% are concerned for what the New Year brings.  FIS is hosting a workshop on 1st December at Midday with experts to review and advise on how members need to prepare for the new points based system.

In a recent survey FIS asked members a number of key questions around the new points based system.  Concerns are amplified in the larger specialist employers, where 40% were currently experiencing shortages and 74% believe the new system will have a negative impact on their business.  Other interesting data revealed that respondents relied on labour gangs/agencies for an average 11% of the workforce, this again rises for the larger businesses.

FIS CEO, Iain McIlwee stated “The figures presented by Noble Francis at our AGM show that we have already seen an exodus of EU workers and this snap survey has not allayed our concern that we could be facing a real challenge in the New Year.  Clearly the difficulty is that these are unprecedented times and making sense of any data is difficult.  Will COVID restriction soften and ease travel concerns? How hard will Brexit be? What will the impact on currency be here and across Europe? How will this impact rates here and abroad and how attractive will that make UK versus other possible work locations?

We need a crystal ball to know for certain what people, who do not necessarily have deep roots in the UK, might decide to do.  But, when we need the UK to be primed to Build Build Build, the Government have taken an unnecessarily hard line on construction workers, which could come back to bite us by shortening labour supply, impacting programme and driving wage inflation.  More of a staged approach would be better for industry, particularly given the huge dent in training and recruitment activities we have seen in 2020 due to COVID.”

FIS is attending a roundtable on the 4th December with the Home Office and colleagues across construction.  We are still gathering information to feed in, if you wish to feed your views in, please contact iainmcilwee@thefis.org or phone 07792 959481 or you can still add you results to the final survey here.

• A full report from the FIS Research on Immigration is available here (note FIS is keeping this survey open til Thursday 3rd December and if you have not responded we encourage you to add your data).
• For a detailed explanation of the points based system and recommended next steps (including questions to ask your workers) click here
• To book on our Preparing for Brexit: Movement of People Workshop click here

Construction Sector

A new report produced for FIS Members by Barbour ABI indicates that the total value of construction contract awards in October was £4.9 billion based on a three month rolling average.   This is a decrease of 9.4% on September and follows three consecutive months of good growth (see fig. 2.3). Annual comparison shows it is also 1.1% lower than for October 2019. In the three months to October 2020, total contract awards were valued at £14.7 billion which is 75.7% higher than for the previous quarter and is also 1.3% higher than for the comparable quarter ending October 2019.

There was an increase of 8.7% for contract award numbers this month at 871 compared to September.   Annual comparisons show marginal (0.8%) improvement.

Project by Region

The North West was the leading region in October with 19.8% of awards and a total of 120 projects. The second largest region was London with value share of 13.8%, whilst tying for third place was the East of England and Scotland both with 11.1% of awards (see fig. 2.2).

Cumbria was the location for the largest contract award in October which was the £175 million Woodhouse Colliery Cumbrian Deep Coal Mine and which was awarded to Hargreaves Services. The second largest award this month was the £126.7 million Gull Wing Lake Lothing Third Crossing in Lowestoft and the successful contractor was Farrans Construction.  The One City Road Redevelopment in Manchester was the third largest award at £121.4 million which was awarded to Marshall Construction (West Yorkshire).

Types of Project

The residential sector maintained its leading position in October accounting for 36.8% of contract awards and 202 projects. Underpinned by some major civils awards, infrastructure was the second largest region this month with 22.2% of awards and 131 projects. Accounting for 14.3% of awards and 148 projects, the commercial and retail sector was the third largest in October.

The leading residential award was the £94 million Strawberry Place development in Newcastle upon Tyne which will include 328 flats as part of a mixed use development and was awarded to Tolent Construction.  The Metallurgical Coal Project Woodhouse Colliery was the largest infrastructure project valued at £175m which will see the development of a new Cumbrian deep coal mine. The largest commercial and retail award this month was the £121.4 million One City Road Redevelopment
in Manchester where Marshall Construction (West Yorkshire) will provide 48,570 sq m of new office space.

FIS members can read the full report here.