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forecast by the organisation just three months ago.
This negative outlook reflects “concern around a host of price pressures arising from both local and global issues”, says the CPA, despite demand remaining strong across the industry in Q2, and a project pipeline that will support activity levels until at least 2022 Q3.
Prior to the conflict in Ukraine, UK construction was already facing labour and product availability issues and the impact of reverse charge VAT and IR35.
Rising energy costs were driving near- record price increases in construction products and the continued conflict is exacerbating this issue.
While the broad picture is one of positive market conditions in the short term with anticipation of tougher times ahead, the CPA says that the impact of these pressures on demand, and of more general rising costs, will vary considerably by sector.
As such, although demand remains high for private housing repair, maintenance and improvement – the stellar performer post the initial Covid- 19 lockdowns – the CPA reckons this sector is arguably the most exposed to current price inflation, falls in consumer confidence and pressures on household incomes.
As a result, private housing repair, maintenance and improvement output is expected to fall by 3% in 2022 and 4% next year from the current all-time highs.
Private housing, the largest construction sector, remains strong, although forecast growth (+1%) is a third of what it was in the previous quarter, says the CPA.
The fastest growth is expected in the industrial sector, in which output is forecast to rise by 9.8% in 2022 and by 9.3% in 2023, due to a strong pipeline of warehouse/DC projects, thanks to the shift towards online shopping.
While infrastructural activity is also set to continue, those most exposed will be contractors working to fixed-price contracts.
Noble Francis, the CPA’s Economics Director, says of these figures: “The major challenge is creeping uncertainty. The immediate picture is one of resilient demand and healthy pipelines.
“Longer term, the current inflationary pressures, if sustained, will have an increasingly depressing impact, while the continuation, or potential escalation, of conflict in Europe presents an existential risk.”
www.bmbi.co.uk www.constructionproducts.org.uk
Walmart drones on...
Over the last year, delivery via drone has caught the attention of the media, with some big names in retail and fast food grabbing headlines as a result.
And now Walmart, the world’s biggest retailer, looks to be getting serious about delivery by drone, having announced that it is expanding its drone delivery network to 34 sites across six states by the end the year.
This means Walmart’s drones could reach as many as four million US households and deliver over a million packages by drone in a year.
So, customers in Arizona, Arkansas, Florida, Texas, Utah and Virginia will be able to order from tens of thousands of eligible items up to a weight limit
of 4.5kg per delivery in as little as 30 minutes and all for a modest delivery fee of US$3.99.
Walmart has partnered with DroneUp for this service and has already completed hundreds of deliveries within a matter of months, with customers not in fact seeking emergency supplies as expected but looking for convenience.
Participating stores will house a DroneUp delivery hub with a team of certified pilots, operating within FAA guidelines, that safely manage flight operations for deliveries.
Once a customer places an order, the item is fulfilled from the store, packaged, loaded into the drone and delivered right to their yard using a cable that gently lowers the package.
On top of its Walmart work, DroneUp will also be able to offer additional drone services through the hubs, such as deploying drones for aerial inspection, or for first responder or public safety support.
www.walmart.com www.droneup.com
global eyes
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JUNE 2022 | NZHJ 51