The Big Day for Construction

It is an interesting phenomena that in the UK construction make-up of the economy is only around 6.5% of GDP.

George Osborne wears a lot of hard hats for that  - yet you never see him volunteering in a call centre or working in an office doing some marketing services work - both of which are services industries which account for around 70% of GDP!

Today the Government has some crazy idea about forcing housebuilders to build; as if developers are not going all out.

Here are some timely anecdotal tips:

Berkeley Homes is run by the most canny real estate investor in the UK - Tony Pidgley. He has long been trying to build as many houses as he can whilst the boom last and running down the land bank of his company whilst prices for land are so high.

Also, a friend of mine in the construction industry has noted that overall capability in the sector is well down on what it was in the 1990's. Major Government schemes slowed and also public sector work had crowded out private sector early in this century - a final hit was with the Financial crash. All the major companies are now smaller and many are in financial trouble. Even big players like Balfour Beatty have had a bad year; their shares are down over 30%. Where these companies like Laing O'Rourke are doing well is in the Middle East, not in Blighty.

Against this backdrop of housebuilders working at capacity and commercial construction struggling with demand overall we have the Government claiming it is going to beat them up - by trying to out compete them.

Where are the businesses going to be to complete these houses then? Where are the contractors? What price are they going to charge the government when their issue is supply chain challenges and escalating costs - not lack of demand?

I fear another Government solution has been found for the wrong problem at exactly the wrong time in the market.

Battersea madness

I have been to the new Battersea site to see much of the development going on there. It is good that finally the Malaysian investors have taken on the site and the team that the previous Irish investors had to now develop the site. Such a prime space has been wasted all these years and now there will be something done with it that is useful.

Even better it is lots and lots of small flats which is all people can afford these days in London.

No madness here you say? Well I see two big pieces. Firstly the old power station is a monstrosity and it would have been much better to knock the thing down, given it is very polluted and not that sound. But not only have the council insisted on keeping the old building, but also two useless cranes in the Thames which are to be restored.

of course, some will argue the power station is a nice old building, largest brick structure in the world etc. I say so what.

But the really stupid thing is the towers. These are made of a non reinforced concrete which is now deteriorating. Every now and again a big piece will fall off. This won't do when the sight is full of busy foreign students enjoying their new flats. So instead the Battersea owners are going to take them down and replace them with plastic ones.

No this is mad, they serve no purpose and are very expensive, plastic is hardly the most aesthetic product and in this case there is just no need. It's a mystery to me as to why this is necessary as part of the grade one listing.