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Do you know which of your markets are set to grow?

When developing an appropriate marketing strategy, it is important to start with a good understanding of the current external market conditions and the future market trends.

In particular, knowing the answer to the question above will help to ensure that:

  • You can help grow turnover by ensuring you are operating in growth sectors;
  • Your marketing activities are focused on the right sectors to ensure the best possible return;
  • You keep your cost base under tight control by matching your resources to customer demand;
  • You develop more accurate sales forecasts.

So what’s the outlook for the construction industry?

With all the main construction forecasters now predicting a fall in output of between 5-8 per cent this year with a further drop in 2013, the outlook might at first seem to be gloomy.

So when developing a five-year strategic plan for an industry that is in overall decline, it has never been more important for marketers to have a detailed understanding of how each sector is likely to perform and what the key drivers for growth are in each area. 

For example, despite all the gloom there are bright spots in the industry to target.

The regulated sectors such as rail, energy and water are all set to experience steady growth over the next five years as the government seeks to ensure the UK’s core infrastructure is fit for the 21st century.

This demonstrates the massive influence the government has over the performance of most of the industry, and highlights the need to ensure you are monitoring the potential impact that politicians’ decisions will have on the level of work available on a continuous basis.

Make sure you understand all the market dynamics

It is also important to understand the regional dynamics in the construction industry. For example, output in Scotland and the South-west is forecast to drop by 10 per cent in 2012, while the London region should deliver low levels of growth.

So why is there such a difference between these regions?

One reason is the mix of public and private sector work. The northern regions of the country have historically relied more on public sector work, which is currently in steep decline, as the cuts really start to have an impact.

However, London’s growth is largely attributed to both new work and repairs in the commercial and infrastructure sectors, with stronger activity in offices and rail offering the most significant boost.

Understanding these market nuances is a vital part of improving the accuracy of your forecasting process.

Make sure you look at all the scenarios

Going through the best and worst case forecast scenarios is also a worthwhile exercise. For example, if the eurozone was to collapse we could very well find ourselves back in 2008/09.

The resulting crisis led to sales of bricks and blocks plummeting by around 40 per cent over this period, followed by savage cuts to budgets and headcounts.

Do you have plans in place to adapt the business to these varying scenarios, over which you have no control?

Developing a reliable market forecast that can then feed into your market information system can only help you make the best possible decisions.  

For more information on Leading Edge’s Construction Forecast visit: or go to the CIMCIG website.

Nick Holloway has over 12 years of experience in the construction industry and is now a senior manager at Leading Edge, a market research and strategy consultancy specialising in the construction and manufacturing sectors. Nick is an experienced project manager and chartered marketer and is also a member of the organising committee for CIMCIG

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