Cranes 'disappearing' from UK skylines

Data obtained by the firm is the latest evidence of a slowdown in construction activity around the UK following the completion of various projects related to the Olympics, and is likely to cause further concern around the future of infrastructure spending ahead of next month's Autumn Statement.

Pinsent Masons says that the research demonstrates the most tangible evidence yet of a dearth of major infrastructure projects which it says is required to boost the construction industry, create jobs and alleviate youth unemployment.

Graham Robinson, Global Business Consultant in the Infrastructure Sector at Pinsent Masons says, "People often look at the number of cranes as a barometer of the health of UK construction. If that is correct, then we should be concerned. The lack of cranes on UK skylines is symbolic of the sharp falls in new commercial and public-sector construction seen in the last year and the lack of positive UK infrastructure policy. It is also a sign that construction projects are getting smaller, forcing larger construction companies to compete for smaller projects."

The data shows that:

• only 413 tower cranes were erected around the UK in the first six months of 2012 – almost half the figure for the same period in 2011

• the picture in London is particularly stark. Only 200 cranes appeared on the capital's skyline in the past six months compared to 366 for the same period in 2011, a fall of 45%

• the dearth of major construction projects in UK cities outside London is worse with an overall fall of over 50%. While 200 cranes have been erected in London in the first half of 2012, only 28 have been established across major UK cities including Aberdeen (2), Birmingham (7), Edinburgh (8), Glasgow (3), Manchester (8), and Leeds (0) over the same period

• of the cities surveyed, Glasgow has been subject to a steep drop-off in projects, with an 85% drop off in new cranes being erected 

Graham Robinson says, "The massive fall in the numbers of tower cranes across the sky lines of the UK’s major cities shows just how far workloads have fallen in the construction sector across the UK, driven by the sharp falls in commercial construction and the deep cuts we are seeing in new public sector construction.”

By analysing the number of Tower Crane Notifications received by the Health and Safety Executive over the past two years, Pinsent Masons says that it is able to provide a different perspective on construction across the UK.

"Tower cranes are generally only required for major projects so their absence from the skylines of cities around the UK tells its own story. This is forcing larger construction companies to compete for smaller projects", says Robinson.

"The stimulus of the Olympic Games is gone and we have to get clearer commitments from government on a whole raft of policy concerned with building the infrastructure that Britain needs."

TABLE: Number of Tower Crane Notifications 2011-12

Source: Pinsent Masons / Health and Safety Executive

Job losses

Robinson continues:

“While the UK economy grew by 1% in the third quarter the beleaguered construction sector has continued to suffer from a falling workload with output shrinking by a further 2.6% quarter-on-quarter. This brings output in the sector, which is one of the UK's largest employment industries, down by 11.3% year-on-year with unemployment and insolvencies within the sector increasing as firms struggle with a massive drop in workload."

Pinsent Masons says that problems in construction have led to significant job losses, with almost 400,000 - or 16.5% of the entire UK construction sector workforce - laid off since the start of the financial crisis to the end of June 2012.* This compares with 8.5% for manufacturing and 9.1% for all production industries.

“Contagion within the construction supply-chain is spreading with input prices for construction still rising, as workloads continue shrinking”, says Robinson

Need for improvement

He continues: “The overall quality of the UK’s infrastructure is ranked 24^th in the world by the World Economic Forum, way below any of our European competitors and with Switzerland, Finland and France all ranked in the top 5 globally.”

"The government is making some progress on infrastructure policy, for instance through the UK Guarantee Scheme. However progress remains slow and the UK Guarantee Scheme has so far not extended to local projects and the latest crane survey highlights the impact that is having. The market is expecting clearer policy statements by government for infrastructure in next month's Autumn Statement."

“With further declines in workload still expected, employment in construction is likely to shrink further with the prospect of further insolvencies across the sector. A bleak winter is predicted for the construction sector."

* Source: UK Labour Force Survey