Greenshoots? UK steel construction survey reveals

Thank you to all those who recently participated in our ‘Steel Construction Industry - Market Trends & Trading Conditions' Survey. I hope it provides you with a valuable insight into how, as a whole, the sector is coping in these recessive times. To view 2010 full survey results, click here.

If you are a subscriber to our email newsletter or reader of Ridba Journal, you will be aware that we conducted a similar survey last year, click here to view last year's results or to view the Ridba Journal's article. With the addition of a few more questions, as requested by you, it has provided a helpful basis of comparison for this year's results.



The general feeling, as the survey results reflect, is that the worst is over, even if we are still feeling the effects of the recession. There are hopes of recovery, but the sector is still in for a tough time, with a long road to recovery.

In our previous 2009 survey we revealed how price was considered the most important factor for both what was felt your customers made priority and for yourselves. This trend has continued, although with less intensity. Following this is reliability, which has a similar percentage share to the previous survey, and then quality. It is encouraging to see a 200% increase in participants considering quality to be their most important factor. Suggesting that Steel Construction attributes have not been forgotten and why it was the preferred choice for construction.

Price continues to be a major contributor reflecting in other questions results, with 88.9% of participants' margins remain either ‘reduced' or ‘heavily reduced' to stay competitive, in similar stead to the 2009 survey results. What is perhaps more concerning is 25% that have reduced margins to below cost to ensure winning a contract. Not a healthy strategy in the long and short term for either individual businesses or the whole sector.

Enquiries levels remain ‘high' for 44.4% of participants, similarly to last year's previous survey, it suggests that rather than converting these quotes to live jobs, contractors and sub-contractors are shopping for the best deal. This is confirmed with the result that 43.4% reporting low potential/confirmed order books over the next 6-12 months.

It seems as though we are scheduled to stay in this predicament for a while longer as when asked how long it would take for market conditions to resume to 2007's level, 55% believe the sector will have to wait ‘24 Months +' until 2012 for them to recommence - that's another two years of reduced volumes.

Hopefully once confidence levels resume, market conditions may improve quicker than anticipated. The survey reveals a majority, 26.3%, are ‘Already seeing signs' of confidence returning, which can only be positive.

As requested from our customers, this time around, participants were asked from which sector they were attaining most business. A 23.6% majority of votes went to ‘Education' followed by ‘Commercial', 20.8%, with ‘Agricultural' shortly trailing with 19.8% of votes. This highlights the sectors reliance of publicly funded projects as of late. However, it also troublingly highlights the degree to which the sector will be affected once or if funding runs out. With the general election scheduled this year, it will most likely ignite policy changes and cuts to government spending. It shall certainly be challenging over the coming years if cutbacks are made as predicted. The construction sector will be more reliant on the private sector to continue any recovery.

With such precarious circumstances occurring in the steel construction sector; added steel costs alongside lower margins and reduced government funded projects, will on put strain on the sector. The future remains difficult to predict.


The results reflect a sector in a slightly better situation, but still far from providing a reason to expect a strong recovery any time soon. The construction industry is a major driver of the UK economy. Reportedly for every £1 spent in construction, £2.84 is generated. It is hard to see how there can be any significant recovery in the UK economy whilst construction is still in recession. Publicly funded infrastructure projects have offered a temporary lifeline and without continued Government funding it only offers the economy an artificial inflation, in the future we may see the sector go backwards again before it goes forward.

It is our job as an established business in the sector to promote the industry and ensure we add value to products and services. Here at Albion, we have invested in our services and ‘Product Development Program'. The recent re-release of Albion Zed Purlins and Albion Cee Section range has been geared around a significantly improved strength to weight ratio, offering added value alongside our industry beating 5-7 working day delivery performance. We will continue to adapt and strive to promote the sector to ensure the quickest escape from this recession.

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