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So what really drives the construction industry?

Last week I, like many others, enjoyed the presentations given at the CIMCIG seminar: Profiting from housing growth: new housing, new growth, which took place at the Building Centre in London on 11 May 2010.

One of the common themes that ran through pretty much all of the presentations was that of government incentive and inducement. On the one hand we have government funding to ease the economic crisis through schemes such as Kickstart, then on the other there is the additional burden of meeting requirements such as new Building Regulations and the Code for Sustainable Homes to name but two.

Somewhere in this I started to wonder what has happened to good old market forces and customers driving demand, both in terms of volume as well as product choice. Speaker after speaker talked of varying levels of government control to either stimulate output or to influence the standard of the buildings constructed.

In a month’s time, CIMCIG will be publishing the first of what we hope will be an annual occurrence which we are imaginatively calling the CIMCIG Report. This year’s paper will look at the commercial value of sustainability. It will also examine the barriers that are preventing the take-up of sustainable building systems and technologies. In this context, sustainable has a strong bias towards the environmental aspects of the sustainability.

Being in the fortunate position of knowing something of the report’s contents, the whole issue of what drives a market comes to mind yet again. Although there is a huge amount of evidence that the UK public generally want to do their bit for the planet and society, it is still not proven to be financially viable for most of us and comes with a cost that many are finding difficult to bear.

This sentiment also runs true for many corporate clients of the construction industry. Despite the abundance of CSR messages claiming otherwise, most buildings are procured to the Building Regulations and not better.

In both cases, housing and sustainability, the conclusions are that most customers will not willingly pay more for better housing or greener lives. The homebuyer will not pay more for a better-than-Part L-compliant house, so government uses the regulation to move the standard forward. Not market driven.

So government intervention comes back into play to nudge (or is it force?) the country down certain paths. Should we be happy with that?

So where does market demand and the customer being king all fit within this scenario? And what role should government play? Is it there to stimulate demand, or is it there to let the market drive that and government provide a framework within which it should operate?

I for one see these questions as key to the credibility of the new ‘love in’ on Downing Street.

Details of the CIMCIG Seminar: Profiting from housing growth: New Housing, new growth can be found on the CIMCIG website in the Events section in the Knowledge Hub.

The CIMCIG Report is to be published and launched at the CIMCIG Summer event to be held on the 22nd of June at the Building Centre. For more details visit the events section of the CIMCIG website.

Ian Exall is the Marketing Communications Manager at insulation manufacturer Rockwool and a committee member of CIMCIG, the Chartered Institute of Marketing’s construction industry group.