Construction WorX - Issue 4 - October 2013 by Construction Equipment Association

The Voice of the UK Construction Equipment Industry

ISSUE 04 OCTOBER 2013

MANUFACTURERS FACE POSSIBLE ADDITIONAL LEGISLATION WITH REGARDS TO OPERATOR VISIBILITY

CEA CONFERENCE

NEWS

6-10

15-20

HARD DATA

28-29

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CONTENTS 4

F ROM TH E PRE SID E NT

Nick Ground looks forward to future CEA missions

6- 9

M E M B E R NE WS Member company news round-up

10 I N TH E L OB B Y Rob Oliver explains the automotive strategy and recognises the benefits of a CEA strategy

2013

PL A N TWORX 2015 NE WS

15-18 October

2-6 December

Plantworx is moving to a bigger and better site for 2015 at Bruntingthorpe

BICES Beijing, China

CEA Trade Mission to Brazil Brazil

15 - 2 0 C E A C O NFE RE NC E

19 October

4 December

International Rental Conference Beijing, China

General Technical Committee meeting KAB Seating, Northampton

All of the news and views from this years’ successful CEA Conference - Contructing The Future, Machines, Money and Markets

C PA S TA RS OF THE FUTURE 20 14

Calling all apprentices, the CPA’s Stars of the Future competition will run through 2014 Malcolm Kent assesses the effect of a call for changes to operator visibility legislation

28 - 2 9 H A RD DATA Conference speakers talk through the numbers as the equipment market starts to recover

30 - 3 1 OV E R TH E HORIZON International Construction’s Chris Sleight looks at a brightening global outlook for manufacturers

33 I N TE RV I E W WITH DAV ID RE D HEAD The CEA’s International Trade Ambassador is determined to boost exports for UK manufacturers

34 - 3 7 I N TE R N ATIONA L & C OMING U P Reports from Bauma Africa and the CEA Mission to Mongolia and a look forward to Conexpo and the Mission to Brazil

38 YO UR S H OUT Brendon Powerwashers’ Chris and Rob Hendy reflect on

The Construction Equipment Association (also trading as CEA) is a company registered in England and Wales with company number 04930967. VAT number 243 3858 54. Registered Office: 1 Bickenhall Mansions, Bickenhall Street, London, W1U 6BP, UK The secretariat of the CEA, Administration Services Ltd (www.admin.co.uk), has been awarded accreditation by the AMC Institute (www.amcinstitute.org), the global trade association representing the association management industry.

ICEF 2013 Amsterdam, Netherlands

2014

24 - 2 6 TE C H N I C A L BRIE F

a successful visit to Mongolia

20-22 November

10 January CEA Management Council meeting Venue tbc

4-8 March Conexpo Las Vegas, USA

24-26 June Hillhead 2014 Buxton, Derbyshire 25-28 November Bauma China Shanghai, China

2015 February bC India Mumbai, India

2-4 June Plantworx 2015 Bruntingthorpe, Leicestershire

20-25 April Intermat Paris, France

D AT E S F O R YO U R D I A RY

Although care has been taken in preparing the information supplied in this publication, the CEA does not and cannot guarantee the accuracy of it. The CEA cannot be held responsible for any errors or omissions and accepts no liability whatsoever for any loss or damage howsoever arising. The views do not necessarily represent those of the CEA. Construction WorX is printed by: pb DIGITAL Limited Contact: Paul Bennett Tel: +44 (0)1489 780 781 E-mail: paul.bennett@pbdigital.co.uk www.pbdigital.co.uk

The Construction Equipment Association Airport House, Purley Way Croydon CR0 0XZ United Kingdom Tel: +44 (0)20 8253 4502 Fax: +44 (0)20 8253 4510 E-mail: cea@admin.co.uk www.coneq.org.uk

FROM THE PRESIDENT C E A M A N AG E M E N T COUNCIL President Nick Ground GKD Technik Ltd

Vice president Nigel Baseley Perkins Engine Co Ltd

Paul Ross Ricardo Plc Val Ledden Volvo Construction Equipment Ltd

The busy CEA schedule continues apace in 2013. We recently hosted our annual conference in London. A regular fixture in the calendar, it was displaced by Plantworx to an autumn slot this year. Not withstanding, I am pleased to report a great attendance to listen to Sir Richard Lambert, Iain Wright MP and other commentators on the subject of Machines, Money and Markets.

James Venerus Komatsu UK Ltd Rory Keogh Gomaco International Ltd Mike Hawkins CNH UK Ltd

The feedback I have received since, suggests that this was one of our best yet, even if the most that our market experts could offer was single digit growth in Europe.

Keith Dolbear TriMark Europe Ltd

Plans for the next Plantworx show are underway and the big news is a change of venue to Bruntingthorpe, for 2015. There is more detail elsewhere in the magazine, but I believe that the new venue will allow us to build on the foundations we laid earlier this year, to provide a top class shop window for the UK construction machinery industry.

Daniel Thompstone JCB Sales Ltd

Iâ&#x20AC;&#x2122;m writing this whilst en-route from the Bauma Africa show. The CEA ran a UK pavilion and we were overwhelmed by the demand. We took as much space as the exhibitors would let us have and could have sold more.

C O NS TRU C TIO N WO RX IS PRO DU C ED B Y:

It is fantastic to see UK companies taking steps into new markets. Certainly, there are opportunities in sub-Saharan Africa to be grasped and I hope we can report successes in due course. Do not forget that there are grants available to assist with attending these exhibitions and trade missions and they are more generous than previously. Next stop Brazil for our intrepid missioners.

Editor - Dan Gilkes email: dangilkes1@mac.com

Closer to home, the Management Council has been working on our future strategy, looking to put a programme together to continue and improve our government relations and lobbying, educational links, export activities and technical influence. A longer-term forward strategy was one of my objectives when I took on the presidency and, although it has taken longer than expected, I am confident it will be ready for launch before I step down next year.

CEA/PLANTWORX correspondent Louise Murphy email: louiseamurphy@AOL.com Design and production Duncan Allen email: duncan.allen@pbdigital.co.uk Advertising - Peter Knott email: peter.knott@admin.co.uk Publisher - Rob Oliver email: rob.oliver@admin.co.uk

president.cea@admin.co.uk WWW.CONEQ.ORG.UK

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MEMBER NEWS Campbell Contracts Gets Hitched With Hill County Fermanagh-based Campbell Contracts has 16 excavators working on the Larne A8 upgrade project in Northern Ireland. Each of the machines is equipped with a Hill Engineering quick hitch, for safety and increased productivity.

We supplied Campbell at the time with our previous quick hitch model, the AL3. Since then they have specified Hill hitches on all their new machines bought from the Case dealer, Sleator Plant.” “Our plant operators like Hill quick

hitches, they are easy to operate, easy to maintain and rarely give bother,” said Mr Kelly. “When you do the work we do it’s very important to have a safe and reliable quick hitch.”

The Larne A8 will be a new dual carriageway linking Belfast and Larne, on the east coast of County Antrim. The £100m project will deliver 14.4km of road and is expected to take around two and a half years to complete. “We first started using Hill Engineering for their road brushes and dump trailers back in the early 1990’s and found them to be very reliable and well made,” said Rory Kelly, Campbell Contracts’ health and safety manager. “Our first Hill quick hitch came on a Samsung 210 excavator in 1996 and it proved again to be dependable and easy to use and so we have continued to use Hill accessories for this reason.” Donal Cunningham, regional sales manager at Hill Engineering added, “Rory contacted us about two years ago as the company wanted to upgrade all of its semi-automatic quick hitches to the latest generation Hill fully automatics.

Campbell has 16 excavators at work on the A8 upgrade

Alan Smart wins Remanufacturer of the Year ReMaTecNews has named Alan Smart, founder and owner of ATP Industries Group as Remanufacturer of the Year for 2013. The Staffordshire company was recognised for its innovation, product quality and contribution to the reputation of the automotive and heavy duty remanufacturing industries. “Alan has built ATP into a top-class company with a strong focus on advanced technologies and innovation within the fields of transmissions, torque converters and electro-mechanical components,” said William Schwarck, editor-in-chief of ReMaTecNews. “ATP offers technical expertise, innovative skills and commercial flair in equal

proportions. Under Alan’s leadership ATP has evolved into a highly respected business in which the reman industry can genuinely take pride.” The Award was presented at the ReMaTec2013 remanufacturing exhibition earlier this year in Amsterdam. ATP is one of the largest independent remanufacturing companies in Europe with a number of OEM’s amongst its customers, including Claas, JCB, Manitou and Volvo. The company also sells remanufactured products to the independent aftermarket. ATP remanufactures a broad range of advanced vehicle components, including automatic and manual transmissions, torque converters, hydro WWW.CONEQ.ORG.UK

and electromechanical subassemblies, electronics and ABS and EMS units. It also builds its own range of test equipment. Mr Smart said: “The staff of ATP are the success of the business of which I am extremely proud.”

Alan Smart with the ATP team

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MEMBER NEWS Demonstration Days Sells Out In Ireland CEA member Machinery Movers is relaunching its construction machinery show Demonstration Days, with a machinery demonstration weekend planned in County Cork, Ireland on October 26-27, at Mitchelstown Business Park. Organiser Brian Coogan said, “Machinery demonstrations are considered a key tool for selling equipment, the success of Plantworx 2013 was testament to that, and with a spark of confidence making a welcome return to the industry in Ireland Machinery Movers has taken the plunge to spark interest from within the construction machinery industry.” That interest has exceeded expectations and the exhibition space is completely

sold out. Exhibitors confirmed are dealers for Ireland for Hitachi, Takeuchi, JCB, New Holland, Hyundai Heavy Industries, Wirtgen Ireland, Kubota and Finning. Also present will be Express Earthmover Tyres, Sandvik, Dungannon Plant Sales, McCloskey International, Peleus Steel, HLS, Agrigear and Allu.

Machinery Movers hosted its inaugural event in 2008 and this year’s show plans to build upon that attendance with a target of 4,000 visitors.

“For the dealer, demonstrating is the optimal method of selling equipment as the end-user is offered a first-hand demonstration of the ability of the machine,” said Mr Coogan. “For buyers, the element of demonstration offers them something more, as the insight they gain from a demonstration is far beyond the reach of most sellers outside of a demonstration site.

Hyundai is one of the manufacturers represented at the show

Reducing road traffic at the Olympic Park CEA member BSP International Foundations has been featured in a coffee-table style publication published by UKTI. The book highlights the valuable contribution that UK advanced engineering made to many aspects of the 2012 Olympic and Paralympic Games, and to the 2010 Winter Olympics. It includes case studies featuring a selection of UK advanced engineering capabilities and technologies, that helped make the events a success.

BSP has been at the forefront of the design, development and manufacture of piling and ground improvement equipment, such as hydraulic hammers, for over a century. The firm supplied a midrange CX110 impact piling hammer, a 9 tonne ram, and an HP125 hydraulic power pack. The powerful equipment installed more than 1,200 tonnes of steel sheet piling during the construction of the lock,

driving the double sheet sections down to the required level. “Five years before the event we were delighted to be involved in this prestigious project,” said David Redhead, BSP chairman. “This work on the Prescott Canal offered a sustainable option to transport materials to the site by barge, thus saving huge traffic congestion in the Stratford area.”

Hydraulic piling hammers supplied by BSP International Foundations assisted the construction of a new canal, enabling waterborne transport between the Olympic Park and the River Thames. To reduce the amount of road traffic around the rapidly developing Stratford area, a navigable channel was constructed to link the London 2012 Olympic Park site with the River Thames. Operating before and during the Games, the canal allowed barges to transport aggregates and construction materials to the site, and waste and recycling away from it. This required the building of a 90m long lock, the Prescott Channel Lock and two new lock gates on the lower River Lea.

BSP piling equipment played a key role in the canal construction ISSUE 04 OCTOBER 2013 - VOLUME 22

IN THE LOBBY If I were to ask CEA members what their strategy has been over the last five years, for many it will have been “to survive”. But as heads emerge from beneath the parapet with signs of a market upturn, corporate and governmental strategies are being revisited and renewed. The UK construction equipment industry sits amongst the automotive industry (for those that manufacture the kit) and construction (those that use it). Both sectors have launched HMG-sponsored sector strategies this year. The Construction 2025 strategy was presented at our annual conference by Chief Construction Adviser Peter Hansford. He admitted that implementation detail of the plan had yet to be set out, but the main thrust of the strategy had some clear targets. The objectives are to lower costs by a third, speed up delivery of construction projects by 50%, halve emissions and add 50% to exports. Construction has been bedevilled by commissioning delays, costly procurement systems and arcane planning laws for generations. There have also been numerous plans that have never quite made the improvements needed. Yet construction sector strategists can take heart from the experience of our equipment industry - there is no need to whisper the fact that we have cut emissions by more than 90% over the last 15 years and our exports are again pressing ahead as we continue to send over 75% of our production overseas. The automotive strategy document Driving success - a strategy for growth and sustainability in the UK automotive sector, is longer on specifics than its construction counterpart. Whilst its perspective is from the motor vehicle viewpoint, its themes are in line with our concerns. The focus areas are Innovation and Technology, the Supply Chain, Skills and the overall Business Environment. On innovation, government and business have committed around £1bn for a new Advanced Propulsion Centre

(APC) to promote advanced propulsion technologies. There is also a move to better align the Automotive Council with the Engineering and Physical Sciences Research Council. On supply chain, UKTI is putting £3m into a new Automotive Investment Organisation (AIO). Only one third of the parts in the average British-built car are home produced. It is probably more in construction equipment but not much. In an economy still with 7% of its workforce without a job and unprecedented numbers going through university courses, it seems counter intuitive to be talking about a skills shortage. But that is exactly the position. A rise in apprenticeship places is beginning to have some effect and it is estimated that the automotive sector will be taking on 7,600 apprentices and 1,700 graduates in the next five years. There is also the issue of attracting the right sort of recruit there was a great deal of discussion at the CEA conference concerning the dearth of female entrants into our industry. With this outbreak of strategies, the CEA must do three things. First make sure that all of our members have a chance to

benefit from the government interventions arising from the implementation of the programmes. Second, we and our leading members must be more proactive in ensuring that the construction equipment voice is not drowned out by the motor vehicle and major contractors’ lobbies. They have every right to press their cases, but so do we. Our third response is our own strategy as a trade association that proclaims itself the “voice” of our industry. In the last months, members of our Management Council and a number of our external contacts have contributed their views as to what should comprise our forward goals. The initial independent mapping exercise to show our relationships with government and its agencies and academic institutions has shown us falling short in some areas. Our profile is not as high as it should and could be. As our plan to correct this is developed, there will be a set of critical objectives agreed (and tested with our members) which will inform our activities. So we have not heard the last of strategies...

Rob Oliver Chief Executive Construction Equipment Association

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PLANTWORX 2015 NEWS NEW HOME FOR PLANTWORX AT BRUNTINGTHORPE The CEA’s Plantworx exhibition will return in 2015, with a new location at Bruntingthorpe Aerodrome in Leicestershire. The three-day event will take place from June 2-4, 2015. The inaugural Plantworx 2013 construction machinery exhibition was deemed a huge success, with more than 11,000 visitors making their way to the Coventry site, despite inclement weather. A survey conducted following Plantworx 2013 made it clear that all participants wanted the show to be restaged in 2015. Bruntingthorpe was chosen as the venue following intensive research by the Plantworx team. The 2015 show will cover 135,000m2 using Bruntingthorpe’s ‘Indy Circuit’. The venue can more than accommodate the 2015 event, based on 2013’s footfall and size, allowing plenty of room for further expansion in the future. There are hard standing areas that will be used for both exhibition stands and car parking. The ethos of the 2015 Plantworx event will remain the same as the first exhibition – a show for the industry by the industry - one where construction machinery can be seen working in real site conditions. The layout of the site has been designed so that Alex Dahm, editor of International Cranes, is a firm supporter of Bruntingthorpe, having grown up in the area where his family still lives. Alex has some very fond memories of the Bruntingthorpe site. “As a boy growing up just a short cycle ride away, for me the airfield, opened as an RAF base during World War Two, was an intriguing place crying out to be explored. Despite being rebuilt for the US Air Force in the 1950s, much of its earlier history remained, especially in the more remote corners of the site. “Investigation of the abandoned bunkers and buildings, yielded occasional finds.

all exhibitors will be in a single area, with parking on hard standing to either side of the show. Alan Batty, managing director of Bomag, is one of the original steering group members and was present at the discussions of the relocation to Bruntingthorpe. He said: “The inaugural Plantworx was a huge success for Bomag. Moving location for Plantworx 2015 was not an ideal situation, but I have visited Bruntingthorpe and the site has a lot to offer compared to Stoneleigh, particularly the large and level show area that means all exhibitors are together in one location.” “After the success of Plantworx 2013, Merlo UK was very keen to look at the proposed site for 2015,” said David Dean, Merlo’s UK marketing manager. “Bruntingthorpe is a fantastic location, steeped in aviation history with plenty of potential for 2015 and future Plantworx events.” Bruntingthorpe’s managing director Dave Walton underlined the 270ha site’s proven ability to accommodate large-scale exhibitions and events. “Bruntingthorpe’s facilities and infrastructure, combined with the staff ’s deep-seated can-do attitude, mean we’re able to be totally flexible. Our ability to cope with large numbers of visitors has been proven on many One prize example was a group of spent brass shell cases from a longgone World War Two anti-aircraft gun. Descending without torches through large and heavy steel hatches into longforgotten places underground sparked imagination of all the things that might have happened there. “I hope to take my children to visit Plantworx 2015, at the same time enthralling the next generation or possibly boring them rigid, with tales of my childhood exploits. At least they will have the latest construction equipment to look at – and who wouldn’t be thrilled with that?”

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BBC Breakfast’s Stephanie McGovern and Simon Frere-Cook announce the location of Plantworx 2015 at the recent CEA conference occasions, the most recent when we hosted Asda’s Family Fun Day for some 20,000 people, all arriving by car.” He added: “Interestingly, our site is familiar to many of the major construction plant and machinery manufacturers who, over the years, have used our facilities, including the deep-digging area, during development and testing of their products.”

WHY IS PLANTWORX NOT GOING TO STONELEIGH PARK IN 2015? “Although Stoneleigh Park is geographically very well placed and was an excellent venue for Plantworx in 2013, for future events it is unable to offer us a large enough site for all the stands to be in the same field, as has been clearly requested by our exhibitors,” said Plantworx exhibition director Simon Frere-Cook. “Additionally there would be difficulties over access and parking, as well as a clash of dates in future years with other regular events at Stoneleigh Park.” To register your interest in exhibiting at Plantworx, contact Angela Spink, on email angela.spink@plantworx.co.uk or telephone: 020 8253 4517.

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FINES LEVIED UNDER NOVA SCHEME The NOVA registration system introduced by HMRC earlier this year affects all companies that import powered construction equipment into the UK, from Europe or the rest of the world. Devised to crack down on VAT evasion, the scope of the scheme has been clarified to confirm that registration is required for all ‘construction and plant and machinery’. That includes excavators, dump trucks, dozers and any crawler tracked vehicle. DVLA is refusing to register any machine that is not registered under NOVA, plus NOVA registration is required regardless of whether road use is envisaged. There are reports that penalties are now being levied under this scheme. The CEA is in dialogue with HMRC and members can contact the CEA offices for further information.

DO YOU WANT TO ADVERTISE IN CONSTRUCTION WORX? IF SO, PLEASE CONTACT PETER ON 07595 845972 TO ADVERTISE OR FOR EDITORIAL CONTACT DAN GILKES AT DANGILKES1@MAC.COM

CEA TO SUPPORT INTERNATIONAL FORUM

The 2013 International Construction Economic Forum (ICEF) will focus on the global equipment industry, with a programme of speakers and networking events covering key issues in the sector. The programme includes several key figures, including Zeng Guang’an, ceo of Liugong, ceo of IronPlanet Greg Owens and Norty Turner, ceo of access rental specialist Riwal.

ISSUE 04 OCTOBER 2013 - VOLUME 22

The event, from November 20-22, will take place at the Hotel Okura in Amsterdam. The keynote address will be given by former Spanish Prime Minister José Maria Aznar, who will speak of the challengers of globalisation and free trade, and their relationship to the construction sector. ICEF will also see the announcement of the International Construction Project of the Year Award, from a shortlist of five major projects including The Shard in central London. For more information see www.icef.biz

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CEA CONFERENCE THE CONSTRUCTION EQUIPMENT ASSOCIATION’S CONFERENCE 2013 PROVIDED INFORMED DEBATE AND A FASCINATING GLIMPSE OF THE FUTURE FOR MACHINERY MANUFACTURERS, SAYS DAN GILKES This year’s CEA conference, Constructing The Future – Machines, Money And Markets, offered more than 140 delegates an opportunity to hear from a wide range of speakers, under the moderation of BBC Breakfast’s Stephanie McGovern. As well as keynote speaker Sir Richard Lambert, closely examining current economic and trading conditions both in the UK and in key export markets, the conference looked forward through a Futures Panel to the possible markets of 2020.

Delegates were updated on the progress of London’s Crossrail project, with an in-depth look at the procurement process. There was a presentation of the Construction 2025 Industrial Strategy For Construction, from Peter Hansford, while a market panel dissected the economic figures to demonstrate trends and forecasts for equipment sales across the world. With a General Election less than two years away, attendees had a chance to hear the plans of the opposition, as Shadow Minister for Business, Innovation and Skills Iain Wright MP presented his thoughts on construction skills. Those present had the chance to network over lunch, thanks to Volvo CE, and to view showcase exhibits from CEA

member companies that had sponsored this year’s event. While the conference had all of the usual ingredients - first-class speakers, in-depth analysis and a broad range of content it also incorporated one thing that has perhaps been missing from recent years. That distantly remembered component, was confidence. Yes China might not be the world market saviour that many had hoped for and no, we certainly aren’t back to the years of construction boom, but there was definitely something in the air. This feeling was reflected in many of the presentations, with growth prospects, particularly for those member companies who export, showing definite signs of improvement.

GLOBAL ECONOMY STRENGTHENS AS CONFIDENCE GROWS This year’s keynote speaker was Sir Richard Lambert, a business ambassador for UKTI and Chancellor of the University of Warwick. Sir Richard was formerly director general of the CBI, a member of the Monetary Policy Committee and a former editor of the Financial Times. There could be few people better equipped to discuss the UK economy, and his address was both fascinating and informative. “The first point to make is that the major economies of the developed world, the most important markets for most of your companies, have started to look rather more stable,” he said. “Business surveys across much of the Euro zone have begun to look a little more positive over the past 12 months and GDP ISSUE 04 OCTOBER 2013 - VOLUME 22

around the Euro area as a whole rose by an annualized 1.1% in the second quarter. “No one expects the Euro zone to grow by much more than 1% or so over the next year or two though. Even Germany, much its strongest member, faces a period of uncertainty as some of the momentum goes out of its hugely important export markets in the Far East. But it is reasonable to hope that the worst of the Euro zone’s economic troubles may be passing.” He was more positive about the USA’s prospects, saying that the US government has done a better job than most in repairing the damage caused by the financial crisis. Governors of the Federal Reserve Board have stated that they expect growth to continue to pick up in the second half of this year and from then on. He was less optimistic about fast-growing emerging economies though, saying: “There are real worries from countries like China and India that they are running out of fizz.” Here in the UK, Sir Richard said that manufacturing sector output now stands at 90% of pre-crash levels, though in construction, output has dropped more than 15% over the last five years. And he warned that there is still a fair bit of fiscal belt-tightening to take place. Our banking system remains badly bruised too, with lending to businesses still far lower than required. Indeed Sir Richard said that if you measure business investment as a share of GDP, the UK was a lowly 159th in the world last year. Looking ahead he believes that interest rates will remain low, not rising until jobs and incomes are really growing steadily. “Interest rates are going to remain at rock bottom levels for at least 18 months,” he said. “We know that public spending is likely to be squeezed through the election in 2015 and beyond. But one thing is changing, the approach to infrastructure spending, which has been hit so hard during the recession. The consensus is that we have cut back too hard and that increases in infrastructure spend have a multiplying effect in powering economic growth. “There is no debating the country’s urgent need for major infrastructure spending.” One of his many hats is that of a member of the Foreign and Commonwealth Office’s supervisory board. From that somewhat

“Infrastructure spend should recover somewhat in the second half of this decade as discussed, but most of the big opportunities for new investment in the future will lie outside Europe.” Sir Richard Lambert, Business ambassador for UKTI lofty sounding position he said that he has seen real change in the FCO’s approach, with a real push in consular support for exporters, such as many of the CEA’s member companies. “It’s very important for a UK manufacturer to be an active exporter, especially in a global market such as construction equipment,” said Sir Richard. “Infrastructure spend should recover somewhat in the second half of this decade as discussed, but most of the big opportunities for new investment in the future will lie outside Europe.” With that in mind he said that the Foreign Office has had a network shift, transferring resources from mature economies in Western Europe across to the fast growing countries of Asia. “If you fall in the Grand Canal in Venice, you can no longer expect a consular official to pull you out,” said Sir Richard. “But the hope is that you will find more people to help you in the remoter parts of China as well as in new posts such as that in Burma.” Exporters, particularly companies new to export markets, have also been given financial assistance this year, with grants of up to £3,000 now available to help them to attend overseas trade shows and exhibitions. In addition UK Export Finance announced its Direct Lending Scheme earlier this year, aimed at helping overseas buyers to purchase from UK exporters. “The terms and conditions offered by UK Export Finance over the past year have improved significantly,” said Sir Richard. “The take up has been rather slow to date WWW.CONEQ.ORG.UK

though, and it is worth companies’ while to find out more.” Indeed he is keen to see further interaction between government and organisations such as the CEA, and welcomes feedback from members. “I see close association with important trade associations such as the CEA, which is working with UKTI this year and next on missions to places like India, Brazil, China and Las Vegas. “But I would like to hear from you, is UKTI doing a good job and could it do better within its admittedly constrained resources?” Certainly it would seem that the opportunities for CEA members are there, particularly in export markets. Progress is likely to be steady, rather than spectacular, but as Sir Richard said: “At least it seems to me that we can at last start to think more confidently about the future.”

“I see close association with important trade associations such as the CEA, which is working with UKTI this year and next on missions to places like India, Brazil, China and Las Vegas. “But I would like to hear from you, is UKTI doing a good job and could it do better within its admittedly constrained resources?” Sir Richard Lambert

CONSTRUCTION 2025 LAUNCHES INDUSTRIAL STRATEGY “The construction industry contributes to growth in all sectors of the economy. Construction is an enabling sector. The vision for 2025 is of an industry that’s efficient and technologically advanced.” Peter Hansford

to the industry, itself a recurring theme throughout the day of the conference.

Peter Hansford MBA, the government’s Chief Construction Advisor and a former president of the Institution of Civil Engineers, presented the government’s Construction 2025 initiative, an industrial strategy for construction. The strategy sets out a vision for an industry very different from that of today, with 33% lower costs, 50% faster delivery, 50% lower emissions and a 50% improvement in exports. “The construction industry contributes to growth in all sectors of the economy,” he said. “Construction is an enabling sector. The vision for 2025 is of an industry that’s efficient and technologically advanced.” Construction 2025 focuses on key growth markets through smart technologies, green construction and overseas trade, all of which are areas of interest to CEA members. It recognises that Britain has a strong competitive edge, with world-class expertise in architecture, design and engineering. It is also a sector that is set to grow, with the global construction market forecast to

expand by more than 70% by 2025.

“As construction is at the heart of the economy, so people are at the heart of construction. We’ve got to inspire the next generation of girls and boys to make the built environment part of their careers,” said Mr Hansford.

To achieve that growth and to maintain the UK’s position in the global construction market, the initiative calls for the industry to work smart, embracing new technology, while improving sustainability. It also recognises the importance of attracting new workers

To drive this vision of construction the industry must deliver transformational change over the next decade. He says that as the wider economy recovers from recession, construction companies must be able to recruit, retain and develop skilled workers to meet demand.

“This strategy’s publication is just the first step in putting UK construction at the forefront of the global market. Strong leadership will be vital in driving lasting change. The Construction Leadership Council will provide a forum for industry and Government to work together in pursuit of our ambitions.” Peter Hansford MBA, HM Government Chief Construction Advisor

ISSUE 04 OCTOBER 2013 - VOLUME 22

While these are ideals that we can all agree with, some delegates questioned how these targets should be met, and whether there is any substance behind the headlines. “Publication of the strategy is just the beginning of the journey,” admitted Mr Hansford. That process that will be taken forward by the new Construction Leadership Council, co-chaired by Business Secretary Vince Cable and Sir David Higgins, chief executive of Network Rail. “This strategy’s publication is just the first step in putting UK construction at the forefront of the global market,” said Sir David. “Strong leadership will be vital in driving lasting change. The Construction Leadership Council will provide a forum for industry and Government to work together in pursuit of our ambitions.”

AN ALTERNATIVE VIEWPOINT While much of the discussion at the conference centred on existing government policy, spending cuts and investment, Iain Wright MP, the Shadow Minister for Business, Innovation and Skills, was keen to put a Labour Party marker in the sand for the next General Election.

due to rise by 6% a year and Britain is well placed to take advantage.” That said, he felt that many manufacturers still don’t have the necessary support, from government or from the banks. Indeed he said that general investment in manufacturing in Britain is currently the second lowest among the G8 countries, adding that there had been net falls in lending to businesses for 21 of the last 24 months.

“Manufacturing is an essential part of a modern economy,” he said. “We are still, just, in the top 10 of manufacturing countries worldwide and I think that the construction industry is poised for growth, though output last year remained 15% lower than pre-crisis levels.” He recognised that it will be many years before the industry returns to the highs of the building boom, but called on government to invest in construction, particularly in infrastructure works.

Looking forwards, he wants to promote the concept of coordinated competitiveness, with government working with manufacturing to boost sales. “We need a credible and costed pipeline of infrastructure projects,” he said. “However the big prize for manufacturers is the export market. Global demand in the construction equipment industry is

“Business policy can’t simply reside within the Business, Innovation and Skills department,” said Mr Wright. “I want to hear the concerns of the construction industry.”

WHAT THE FUTURE HOLDS, PERHAPS! As much as we need to focus on high achievers, we have a major opportunity to attract young people, but I strongly believe that it starts earlier with kids in school, Val Ledden, md Volvo CE

Before the conference started, the CEA asked members to look back ‘from 2020’ and pick out a critical development that greatly influenced equipment design and demand back in 2013. Four of the respondents were then asked to put their idea forwards for discussion. Volvo CE’s managing director Val Ledden, International Construction

editor Chris Sleight, Ricardo’s Paul Ross and deputy general manager of Komatsu UK Jim Venerus made up the Futures Panel, each contributing a possible scenario for the future. BBC Breakfast News business presenter Stephanie McGovern moderated the lively debate between members of the audience and the panel. Among the topics for discussion were the challenge of engaging young children and attracting them to the construction equipment sector. Mr Ledden, himself a

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previous apprentice, talked of the need to get into schools ever earlier to attract children, and not to concentrate solely on those heading to university. “As much as we need to focus on high achievers, we have a major opportunity to attract young people, but I strongly believe that it starts earlier with kids in school,” he said. Mr Ross agreed, stating that it is essential to engage with children as early as possible, even in primary school. “It isn’t just about educating kids though,” he said. “It’s as much about educating teachers.”

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C P A S TA R S O F T H E F U T U R E 2 0 1 4 THE CPA’S STARS OF THE FUTURE TO TAKE PLACE AT VERTIKAL DAYS 2014

“We have set a very high benchmark but we intend to make the scheme even bigger and better next year.” Haydn Steele , CPA training manager

to aim for and they found that aspect really motivational. We are looking forward to participating in the 2014 event.”

Finning Academy apprentice Heidi Perry will be aiming for an award in 2014

The Construction Plant-hire Association (CPA) is leading the way in promoting the construction equipment industry to young adults and their parents. The Association’s Stars of the Future scheme is intended to recognise the achievements of young adults training to become plant mechanics, though the PR value to the industry as a whole is equally significant. The inaugural Stars of the Future programme ran during the 2012/13 academic year and attracted 489 entries from a dozen colleges throughout the UK. The first awards ceremony that took place during the Plantworx show in May, attracted hundreds of interested parties. World Land Speed record holder and leader of the Bloodhound project Richard Noble OBE presented the awards, saying: “There is a serious problem finding engineers in the UK. The majority that we do find are in their 40s to 60s. We need new blood and Stars of the Future is a good start.” Haydn Steele, the CPA’s training manager, added: “It was amazing to see so much support for the Stars of the Future,

which encapsulated the ethos of the industry, employers, trainers and the next generation of engineers. We have set a very high benchmark but we intend to make the scheme even bigger and better next year.” The CPA is now busily planning for the 2014 Stars of the Future award event, which will be held at the Vertikal Days show, taking place at Haydock Park, on May 14-15, 2014. The presentation will take place on the first day of the event. The entry criteria for Stars of the Future 2014 remain the same, it is open to plant mechanic apprentices on courses at Level 2 and Level 3. The two national winners receive a substantial value of tool vouchers, with the 20 regional winners also taking away valuable tool vouchers. To date, 10 colleges have committed to the 2014 competition, including the Finning Academy, the National Construction College, Askham Bryan, Bridgend, Coleg Lysfasi, Myerscough, North Glasgow, Reaseheath, Wiltshire and Stafford. Stafford College construction plant lecturer, Eddie Peake, said: “The Stars of the Future event was fantastic and the students who attended found the speech from Sir Richard Noble very inspirational. Seeing their peers receive awards also gave them something

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A recent survey published by Price Waterhouse Cooper (PwC) has highlighted just how important Stars of the Future and other apprentice schemes are. PwC economists have predicted that there could be as many as 100,000 jobs on the cards for industry sectors by 2020, including 50,000 new UK manufacturing jobs, 40,000 jobs in transport and 17,400 new jobs in construction. A report from CIPD (Chartered Institute of Personnel and Development) suggests that there will be 13.5 million job vacancies in the UK over the next 10 years, but only seven million school and college leavers. Of particular concern to the construction sector are leavers with professional level grades, everything from field service engineers to manufacturing employees, in addition to the beating heart of our industry, the machine operators and plant mechanics who keep our machines on the move. “The construction equipment sector is as advanced as aerospace and offers engineers of all disciplines the opportunity to be involved in the creation of advanced vehicles,” said Nick Ground, president of the Construction Equipment Association (CEA) and MD of GKD Technik. “What surprises me is the high number of our sector CEO’s that were once apprentices. Surely that is attractive to future engineers?” To find out more about Stars of the Future call Haydn Steele, CPA training manager on 020 7796 3366 or visit www.cpa.uk.net/stars. Don’t forget to put May 14-15 in your diary and see you at Vertikal Days.

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VISIBILITY COMES INTO FOCUS DISCUSSIONS IN EUROPE COULD RESULT IN CHANGES TO VISIBILITY STANDARDS THAT WOULD HAVE FAR REACHING EFFECTS ON MANUFACTURERS, REPORTS MALCOLM KENT The safety of machinery has always been a key attribute for manufacturers to work on – as if performance, cost, economy, reliability and durability were not enough to keep them occupied. Since the introduction of the single market in Europe, the major piece of legislation regarding this is what is now called the Machinery Directive. The requirement for visibility in the directive is all-encompassing, thus: “Visibility from the driving position must be such that the driver can, in complete safety for himself and the exposed persons, operate the machinery and its tools in their foreseeable conditions of use. Where necessary, appropriate devices must be provided to remedy hazards due to inadequate direct vision.” Remember those words “in complete safety”. That is a big ask. Of course, as the scope of the directive covers all machines from gigantic automotive presses to juicers, there is no detail as to what that actually means for machines as different from each other as a mini excavator and a 300 tonne dump truck. Therefore the technical details for earthmoving machinery have been thrashed out through the workings of the ISO – the International Standards Organisation. There are ISO standards for many safety aspects of earthmoving machinery, such as braking, steering, strength of ROPS and so on, but none have the same high profile at the moment as the visibility standard ISO 5006. The latest edition of this was published in 2006 (yes, that does seem a long time ago) and that was in response to an HSE campaign on visibility in 1998. Nobody said that ISO procedures were slick. Various technological aids for the detection of obstructions and people were

A picture from Rudy Clemens’ petition on visibility considered during the development of the 2006 edition, but it was decided that at that time they were not sufficiently developed for the performance standard to be completely based on their use. So it has stayed based mainly on what was possible just by the use of direct vision and mirrors. Hence the ‘fish-eye’ mirrors seen on the backs of many machines today. Of course, there is nothing stopping anyone going further than the minimum requirement, leading to the number of machines with camera systems installed on them. A project to update ISO 5006 somewhat was kicked off in 2010, but things have rather been brought to a head by a single person. Rudy Clemens, of Germany, sent a petition to the European Parliament complaining of deficiencies in the standard (see box on petitions). His complaint claims that the standard is not good enough to prevent the risk of accidents because of the allowable blind spots. Fig 1 shows one of the images from his petition, claiming a risk to the man on the ground being out of sight to the operator. Of course, one could take issue with the man being there at all, but the complaint has gained traction in Europe.

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The European Commission initially responded that there is a European Directive requiring the separation of traffic and pedestrians on construction sites so that the above scenario should not occur, but when pushed further they have now concluded that the standard is indeed not up to scratch. They have stated further that they will request the European Parliament to raise a formal objection against the standard. Is this starting to sound like a game of Pass The Parcel? If the formal objection is raised and upheld then all bets are off in terms of what manufacturers need to do. Strictly speaking, they need to comply with the wording in the Directive, (remember “in complete safety”?) but they will also each need to decide for themselves how far the state of the art allows this to be achieved. There is a real risk here that customers and enforcers (such as the HSE) will expect to see cameras on machines regardless of how effective they are. The market could be in for a period of confusion where there are many competing claims about which systems are legal and which are not. Meanwhile, the ISO project on the standard trundles on, but don’t hold your breath for the result.

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WHAT DOES ISO 5006 REQUIRE? ISO 5006 sets visibility requirements for two different boundaries around the machine. One is a rectangle 1m beyond the footprint of the machine and the other is a circle at a radius of 12m from the operator’s eye point. There are requirements for being able to see these two boundaries either directly from the operator’s eye point, or by using aids such as mirrors or CCTV. Fig 2 shows the 1m boundary around a wheel loader. Imagine a post 1.5m high being moved around the outer rectangle. The test is that the top of the post can be seen from the operator’s position all the way around, with a maximum blockage of vision anywhere being no more than 300mm wide. Fig 2

WHAT IS A PETITION? Any European citizen, resident or group can submit a petition to the European Parliament on a subject within the EU’s field of activity. This is guaranteed by the Treaty. A petition can be a complaint or a request. There is a committee in the Parliament that considers the petitions, and once a petition is deemed to be valid the committee decides what action to take. This could be passing the matter to the European Commission, passing it to another committee in the Parliament to be taken into consideration in legislation, or preparing its own report. In the case of the petition from Mr Clemens, the committee asked the European Commission to investigate.

The side view (Fig 3) shows the test object on the 1m rectangle and also the 12m circle at ground level. The allowable blockages on the 12m circle vary with the type and size of the machine, but as an example, they would look something like the sketch (Fig 4) for a 20 tonne wheeled loader. Fig 3

Fig 4

So a machine with blockages to vision no worse than shown above on the 12m radius on the ground and no worse than 300mm wide on the 1m/1.5m rectangle would pass. There are no requirements for the area between the 1m rectangle and the 12m circle.

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V O L AT I L E G L O B A L EQUIPMENT MARKET The global construction equipment industry has never been easy to forecast, and changes in the fortunes of many major economies through the financial crisis have not made the task any easier. At this year’s CEA Conference, Off-Highway Research, the Construction Products Association and economic specialists Experian, offered some guidance through the rapidly changing numbers. There seems little doubt that for many of us, an economic corner has definitely been turned. This year’s global equipment market is forecast to be worth around US $93bn according to Off-Highway Research’s Paul Howard. That compares with a global high in 2011 of $109bn. He believes that we are now in a positive situation, though it will take until 2017 before the industry sees sales reach $105bn, close to that 2011 high. Not surprisingly, the massive Chinese market continues to have a major impact on global numbers. In 2007 China accounted for 18% of global demand, versus 20% for Europe and 28% to North America. In 2012 that had changed to 38% for China, with North America on just 14% and Europe taking 13% of machinery. OffHighway Research believes that by 2017 China will be worth 29% of the market, North America 17% and Europe will account for just 12% of machine demand. This year alone the Chinese market will take 85,000 crawler excavators, 142,000 wheeled loaders and 28,500 mini excavators. However Mr Howard says that the Chinese equipment industry is now suffering major over capacity. As an example he believes that China has excess capacity in the wheeled loader market of around 180,000 machines, while it has factories capable of building more than 40,000 crawler excavators more than

(left to right) Experian’s Sonya Patel and William Thomson shared the stage with the CPA’s Jeff May and Paul Howard from Off-Highway Research its internal market requires. It is therefore not surprising to see that Chinese manufacturers are increasingly keen to export their equipment.

different to Europe, with 24% of sales made up of skid steers, followed by crawler excavators on 15%, mini excavators 15%, wheeled loaders 12% and telehandlers 9%.

Globally crawler excavators remain by far the most popular type of machine, accounting for $38.8bn of sales last year. Wheeled loaders are in second spot on $24.3bn, with mini excavators on $6bn, backhoe loaders accounting for $5.6bn and dozers grabbing $5.2bn of sales.

The Indian market has become increasingly important over the last few years and continues to grow strongly. Backhoe loaders are by far the most popular product line, taking 52% of all Indian machine sales last year. Crawler excavators captured 23% with mobile cranes on 14%. By 2017 the mix is expected to change slightly, with backhoes dropping to 42% as crawler excavators climb to 31% of sales.

In the developed European market the product mix is also relatively stable, with mini excavators taking 33% of sales last year, followed by telehandlers on 19% and both crawler excavators and wheeled loaders capturing 16% each. Germany is the single biggest market in Europe, with 27% of sales, followed by France on 21%, the UK 20% and Italy 7%. By 2017 this is expected to change little, with Germany reducing slightly to 24% of European sales, the UK up to 21%, France on 19% and Italy taking 9%. For those companies selling to the North American market there are definite signs of improvement, with steady overall growth predicted for the next three years, though the market will still not recover to pre-2007 levels. In the US the mix is slightly WWW.CONEQ.ORG.UK

Away from machine sales, both the USA and Japan are ahead of the Eurozone in terms of economic recovery, according to Experian’s William Thomson and Sonya Patel. Within Europe the only countries showing growth currently are the UK, Finland, Norway and Austria, though Germany, France and even Spain are expected to grow in 2014/15. Dr Thompson said though that overall construction output is expected to drop by 0.2% between 2013 and 2015, with residential building offering one of the few signs of growth potential. The 19 countries in Euroconstruct recorded €1,323bn of construction work

Global value of construction equipment, by Type 2012 ($ Billion) Rigid Dump Trucks 4.5

Others 0.8

Articulated Dump Trucks 2.4

Key sales trends, by Region, 2006-2017* (Units) 500,000

Asphalt Finishers 0.8

450,000

Backhoe Loaders 5.6

Mini Excavators 6.0

Crawler Dozers 5.2

Key:

400,000

China

350,000 Europe

300,000 Wheeled Loaders 24.3

250,000 North America

200,000 150,000

India

100,000

Telescopic Handlers 3.2

Japan

50,000

Wheeled Excavators 2.5 Skid-Steer Loaders 2.6 Crawler Excavators 38.8

Motor Graders 3.4

Graph courtesy of Off-Highway Research

0 2006

2007

2008

2009

2010

2011 2012 2013* 2014* 2015* 2016* 2017*

* Forecast

Graph courtesy of Off-Highway Research

in 2012. Of that total, 27% was residential repair and maintenance, 22% was major civil engineering, 18% was residential construction, 17% was new non-residential building and 16% was non-residential R&M. Experian believes that total construction output will remain substantially below the 2007 peak for some years to come. The message from the Construction Products Association (CPA) for the UK construction business was more optimistic. The Association’s marketing and communications manager Jeff May said that despite the risk of the Eurozone, growth prospects in the US and Japan were helping to improve international trade.

a boost from Funding for Lending, First Buy and Help to Buy schemes. While education spending continues to be cut, with DfE capital expenditure falling from £7.4bn in 2010/11 to £4bn in 2013/14, academies and free schools are pushing building slightly. Health is also down massively, though he believes that here too spending must rise slightly by 2015. The CPA believes that the office sector will continue to drop in 2014, before recovering in 2017, though this is very much a two-tier market, between London and the rest of the country.

Here in the UK both GDP and construction rose slightly in both of the last two quarters. He expects that trend to continue into 2014 and beyond, primarily driven by the private sector.

Retail markets look set to fall further, as internet shopping continues to grow. However supermarkets are looking at developing smaller units to capture the corner shop business. There is also growth in coffee shops and sandwich chains.

Mr May said that housebuilding starts will rise by 15% this year, followed by double digit growth right through to 2017, thanks to

Though factory building is currently 24% lower than in 2008, the CPA sees recovery this year thanks to rapidly growing export

Global sales of construction equipment 2000-2017* (Units)

markets. In terms of large scale construction, road building output fell by an incredible 44% in 2012, thanks to massive cuts in capital spending. However the CPA expects the Highways Agency’s expenditure to rise from 2013/14, with £725m promised in the Autumn Statement this year. Rail continues to enjoy a period of growth too, thanks to Crossrail and Thameslink. We shouldn’t expect to see any of the main works on HS2 before 2017 though, if at all. Finally the energy sector offers construction companies plenty of growth potential. Decommissioning, smaller renewable projects, offshore wind all show promise. In conclusion, Mr May said that there will be £96.7bn of construction work in 2013, with some sectors growing. There will be industry-wide growth in 2014, with the private sector driving recovery. However, output right up to 2017 will remain below the pre-recession peak.

Total EC19: €1,323 billion at 2012 prices Total civil engineering 22%

New residential construction 18%

1,100,000 Average 2013-2017: 943,770

1,000,000 Average 2008-2012: 854,357

900,000 800,000 700,000 600,000 500,000

Non-residential R&M 16%

400,000

New non-residential building 17%

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013* 2014* 2015* 2016* 2017*

Graph courtesy of Off-Highway Research

* Forecast

Residential R&M 27%

Graph courtesy of Experian

ISSUE 04 OCTOBER 2013 - VOLUME 22

OVER THE HORIZON

GLOBAL CONSTRUCTION OUTLOOK BRIGHTENS THE GLOBAL CONSTRUCTION MARKET IS ENJOYING STRONG GROWTH THANKS TO THE WORLD’S EMERGING ECONOMIES, SAYS INTERNATIONAL CONSTRUCTION EDITOR, CHRIS SLEIGHT Despite uninspiring economic conditions around the world, the global outlook for the construction industry this year is robust. Data from the International Monetary Fund says the global economy will grow by about 3.1% this year. Conditions are expected to improve in 2014 as the US recovery gathers steam and Europe comes out of recession, and global GDP should grow more convincingly, at 4.0%. But construction growth around the world is looking much rosier, with 4.5% growth expected in 2013. The general economic pick-up in 2014 and beyond should see that figure improve further, and for the foreseeable future global construction output will grow at a higher rate than the wider economy. Why is that? The secret lies in the world’s emerging economies, which continue to see much stronger economic growth than the developed world. They are starting from a lower base and are on a steeper part of the growth curve than more mature parts of the world. But whereas a decade ago, these markets might have been dismissed as too small and too risky compared to big, safe bets like Europe or the US, years of strong growth have seen the tables turn. Emerging markets now account for about 57% of global construction output, and their growth rate this year will be much higher than the global average – close to 7%. The reason for construction outstripping economic growth again goes back to where these countries are in terms of

it is impossible to get an accurate figure, but as a general rule of thumb, it accounts for about 10% of GDP. So if you work on the basis that global GDP this year will be about US $75 trillion (£47 trillion), global construction output would be about US $7.5 trillion (£4.7 trillion).

The general economic pick-up in 2014 and beyond should see that figure improve further, and for the foreseeable future global construction output will grow at a higher rate than the wider economy. their development. Many are industrialising and urbanising at a rapid speed, and that entails all manner of construction spending – transport and energy infrastructure to drive industry and affordable housing for the world’s now predominately citydwelling population.

MARKET SIZE If you asked a dozen economists how big the global construction industry is, you’d get 12 different answers. The size and localised nature of the industry means WWW.CONEQ.ORG.UK

At about £155 billion, the UK construction market represents about 3% of the global total. That may not sound like much, but it would place it comfortably in the 10 largest in the world. The US is the biggest at about US $870 billion (£550 billion) this year, followed by China and Japan. Germany is the largest European construction market and still in the global top five, about neck-and-neck with India, at about €260 billion (£220 billion). The UK is on a par with the region’s other dominant economies France and Italy. This year’s global market growth of about 4.5% equates to somewhere in the region of US $340 billion (£215 billion) additional work around the world this year. In other words, construction work equivalent to the entire German market will be added this year. Unfortunately for British companies looking to tap into this potential, they will have to look much further afield than UK shores, or even the rest of Europe. The European construction market as a whole is still declining this year and will be the only major region of the world to do so. Although Germany is not only the biggest, but also the best performing market, the outlook for the region is not a cheerful one. At best there will be marginal growth next year and there is certainly no boom on the horizon. What’s more, notwithstanding a false dawn in 2011, there have been five years of falling construction output in Europe.

World economic growth 2013

World economic growth 2014

Graph courtesy of KHL

Developing economies are growing at a faster rate than mature markets

Developing growth remains well ahead of the global market in 2014

Construction growth this year

Relative market size

Graph courtesy of KHL

UK manufacturers will have to look further afield for sales

There have been five years of falling construction output in Europe, but things should start to improve

This has now seen the market drop to about -20% below its peak in 2008, and contractorsâ&#x20AC;&#x2122; margins are at their lowest for more than a decade as a result. Europe should start to get better from now on, and it remains a significant market, representing about 20% of global output, but donâ&#x20AC;&#x2122;t expect spectacular growth.

Relative market size Other mature 28%

US & Canada 15%

The highest construction growth in the world this year is to be found in developing Asia, where markets will grow by about 7.5% on average. Having said that, all emerging markets around the world should show impressive growth this year. Sub-Saharan Africa will be up about 6%, as will the CIS. The Middle East and North Africa will grow about 5.5% and Latin America will be up some +5%. Over the long term, construction will continue to grow faster than GDP but the two lines will tend to track in the same direction. Compared to the boom years of the last decade, business is bound to feel a little lacklustre, but high growth markets are still out there to be found.

Emerging Markets 57%

Emerging markets make up an increasingly important part of the global construction market ISSUE 04 OCTOBER 2013 - VOLUME 22

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I N T E RV I E W : DAV I D R E D H E A D As the saying goes, rumours of David Redhead’s retirement appear to have been greatly exaggerated. While it is true that David stepped down as the managing director of piling equipment manufacturer BSP International Foundations earlier this year, we found him standing in for current md Richard Melton when we visited recently and discovered that he has recently become a non-executive director on the board of BSP’s parent company Tex Holdings. It is also true that he relinquished his title as chairman of the International Business Group of the CEA, during this year’s AGM at Plantworx. He then immediately took on the role of International Trade Ambassador for the Association, a new position that aims to make the most of his extensive exporting experience. Be in no doubt, David remains very much committed to the promotion of British companies abroad and will be working to increase the number of exporting members in the CEA for many years to come. “I’ve been involved in export for more than 40 years,” he says. “I first got on a plane in 1973 for the company and we have sold machinery and parts to customers in 78 countries since that time.” In fact BSP International Foundations exported an incredible 96% of its production last year, to no fewer than 37 countries, providing David with an ongoing appreciation of the problems that can arise in some export markets, and not just for smaller SME companies. This year alone he and the International Business Group have helped British manufacturers to export to Algeria, Nigeria and the Sudan. “Even people who are well versed in export can learn from others,” he says.

David joined what was at the time the CEA’s Export Group in 1983, becoming joint chairman in 1990. He has been a member of the CEA Council since 1996, while continuing to chair the Export Group, more latterly known as the International Business Group. Of course he is not alone in having a vast knowledge of export markets. Around 75% of UK-built construction equipment is exported and at least 50% of CEA member companies are already exporters. However that means that there are at least 40-50 CEA members not exporting yet. This new position will allow David to take a step back, see what is going on around the world and then bring his knowledge back to the CEA. “I see my role as looking at what is going on in the world and then feeding it back to the IBG,” he says.

“I’ve been involved in export for more than 40 years,” he says. “I first got on a plane in 1973 for the company and we have sold machinery and parts to customers in 78 countries since that time.” David Redhead

The International Business Group holds three to four meetings each year, with 30-40 member companies attending each time. These meetings feature a range of speakers, including reports from major international exhibitions and trade missions.

which is itself leading to an improved service from the IBG for members.

However David says that as much is learned from the round table discussions as from the podium, with members talking about their own export problems and possible solutions. The CEA is constantly looking at ways in which the information from these meetings can be improved,

The IBG is set to offer members a half-day course, that will include information and speakers from UKTI, a bank, a shipping agent and a lawyer.

“We are looking at repackaging the export mentoring service. We want to help those people who aren’t exporting to get into it.” David Redhead

ISSUE 04 OCTOBER 2013 - VOLUME 22

“We are looking at repackaging the export mentoring service,” says David. “We want to help those people who aren’t exporting to get into it.”

“We aim to do the first day in November or December, even if it is just for a small number of companies,” says David. “The export mentoring service aims to get new member involvement, hopefully providing answers to any exporting questions. “If a company looking to export has a problem, for instance, then what is the system for getting help? Joanna is the first point of contact for enquiries and as an organisation we will know who to talk to. We will get an answer, from me, from government, from another member company or from an embassy.”

I N T E R N AT I O N A L N E W S A N D C O M I N G U P BAUMA AFRICA AN INSTANT SUCCESS The inaugural Bauma Africa, held in Johannesburg during September, was an unqualified success. A healthy 14,700 visitors attended the show and while 84% were from South Africa, more than 110 countries were represented. “This is huge for South Africa and the industry here,” said Elaine Crewe, ceo of organiser MMI South Africa. “Bauma Africa has immediately become the largest show for the construction machinery, building material machines and mining machines sector.” More than 750 exhibitors filled 60,000m2 of stand space, keen to capitalise on the South African government’s promise of massive investment in infrastructure over the coming years. “The South African government has set aside ZAR827 billion (£52.3bn) for infrastructure over the next three years,” said Garth Strachan, deputy director general for Industrial Development and Policy Development at the South African Department of Trade and Industry.

The UK Pavilion at Bauma Africa, photos Helen Wright of KHL “The pipeline of infrastructure projects falling under Minister Patel and the Presidential Infrastructure Coordinating Committee up to 2030 has so far been proposed as ZAR4.3 trillion (£270bn), for national and cross-border infrastructure development in 18 strategic projects.”

success, with visitors from many countries keen to talk with manufacturers.

CEA member companies were well represented among the exhibitors and the UK Pavilion was once again a great

PLACES AVAILABLE ON BRAZILIAN MISSION The CEA’s Trade Mission to Brazil in December of this year is almost full, so interested parties should reserve their places now. The CEA has been appointed by UKTI to run the mission, in partnership with the British Consulate in Sao Paulo. It will showcase the best of UK construction and mining equipment, along with safety and environmental technologies. The programme includes a briefing at the Consulate General and a visit to Odebrecht, Brazil’s largest contractor. Attendees will also meet with a host of construction companies and mine owners during the week. The trip will include visits to the Brazilian Institute of Mining, the Brazilian Airport Infrastructure Agency and the Brazilian Army in Brasilia, plus a look at JCB’s new facility in Sorocaba. Companies will have opportunities to set up their own meetings as well as attending Mission briefings. As this is an official UKTI trade mission companies may be eligible for a UKTI Market Access Programme Grant of £600. Full details are available on the CEA website or from gill.stirk@admin.co.uk.

WWW.CONEQ.ORG.UK

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MONGOLIAN MISSION SPREADS THE WORD The CEA has led a successful seminar and mission to Ulaanbaatar, Mongolia. Ten UK companies participated in the events, with the seminar attracting more than 75 delegates from Mongolia, including distributors, end users, government ministries, contractors and funding bodies. Those companies attending also benefitted from briefings provided by the British Embassy team, the Mongolian Ministry of Roads and the Ministry of Railways, highlighting the massive infrastructure plans currently underway within the country. Delegates were also flown to the South Gobi region to visit the Oyu Tolgoi copper and gold mines and the Energy Resources Tavan Tolgoi coal mines. Though the Mongolian economy has slowed slightly from its record 17.5% GDP growth in 2011, GDP growth remained a very strong 12.3% in 2012 and is forecast to be 11% this year. Already around £1.5m of sales have been reported, with several companies having taken on distributors in the region. “I found the visit to be extremely well organised with access to both government bodies and individual companies that I would never have had the opportunity to meet otherwise,” said Martin Cain, chief executive of Dosco Overseas Engineering.

The response from visiting companies was particularly rewarding for the British Embassy, having put a lot of work into the organisation of the event. “I was delighted to see the extremely strong showing from sectors of British industry, which are able to play a material part in this critical phase of development in Mongolia,” said HE Christopher Stewart, the British Ambassador to Mongolia. “British expertise, capability and experience is much coveted in Mongolia but is still in

“Speaking as president of the Association of British Mining Equipment Companies (ABMEC) I found the visit to be extremely informative and the knowledge gained of potential significant importance to our members.” “We are very pleased that we joined the CEA on this mission to Mongolia,” said Chris Hendy, UK and export sales director at Brendon Powerwashers. “Site visits to two of the biggest mines in the Gobi desert also gave us the chance to see more of the country and appreciate the conditions our equipment would endure. From the mission and meetings we are confident that Mongolia has the potential to be an important market for us in the coming years.”

WWW.CONEQ.ORG.UK

comparatively short supply when compared to our main competitors. The CEA mission was therefore an important vehicle for introducing British companies to Mongolia and providing a platform for success for those prepared to work in this demanding but extremely high potential market. “The mission was an unqualified success and we very much look forward to again working with the CEA in exposing the best of British to Mongolia and in turn delivering exciting opportunities for British Industry.”

CEA ROLLS THE DICE AT CONEXPO

WEBSITES FOR EXPORT TRAINING DAY The CEA and UK Trade & Investment (UKTI) have joined forces to offer a half day course on how to maximise your website for international sales. The course, delivered by a professional trainer, will take place at the Best Western Orton Hall Hotel in Peterborough on November 19, and will demonstrate how to build and optimise a successful website to generate a higher volume of web traffic and gain new business from overseas customers.

The CEA will once again host the UK Pavilion at the Conexpo-Con/Agg exhibition in Las Vegas next year. The show, which takes place on March 4-8, will be the largest construction equipment exhibition of 2014, with more than 2,400 exhibitors and an expected 130,000 visitors.

a more cost-effective exhibitor pod, which includes two wall panels to display graphics, a table and two chairs, plus access to the CEA UK meeting area.

The CEA is able to offer member companies a choice of a full shell scheme stand within the Pavilion, or

For more information contact Joanna Oliver MBE or Angela Spink at the CEA.

There is a small amount of space remaining within the CEA UK Pavilion, but it won’t be around for long, so don’t delay. UKTI grant support is available for eligible UK companies, to help with the cost of stand or pod space, display materials, freight etc.

Delegates will be able to find out how to plan an international web strategy from the start, to target international customers. It will look at ways in which your company can be visible on the web and how to increase the number of web enquiries from outside the UK. The workshop will include case studies of UKTI clients that have already achieved new international business through an improved web presence. Attendees will also be able to learn from and network with other companies that are going international through the Internet.

UKTI TAP EXHIBITOR GRANTS – UP TO £3,000 As mentioned in the last issue of Construction Worx, UKTI grant levels have been increased recently.

Application packs, grant application forms and terms and conditions can be downloaded on the CEA web site: www.coneq.org.uk

ISSUE 04 OCTOBER 2013 - VOLUME 22

New funding means that at exhibitions in high growth markets grants of £3,000 may be available at new events or to exhibitors who did not exhibit at the last edition of the show. Under the new UKTI grant rule changes you may now also claim for a grant at an exhibition if you did not attend the previous edition, even if you are not a new exporter.

YOUR SHOUT been involved in. Meetings with the companies that showed interest followed. The day went very smoothly and all the mission attendees were happy. To the bar and then an early night, as we were booked onto an early flight to the Gobi Desert to visit the OT copper mine and the UHG coal mine. This was particularly of interest to myself and Rob, as potentially we might actually see a ‘Brendon in the Gobi’.

BRENDON POWERWASHERS DIRECTORS ROB AND CHRIS HENDY JOINED THE CEA’S MISSION TO MONGOLIA, FOR A REAL TASTE OF INTERNATIONAL EXPORT Brendon Powerwashers’ first international exhibition was the 1995 Bauma in Munich.This was our first meeting with the infamous Rob and Joanna Oliver. Now we were on our way to Mongolia. Why? Joanna going was a good reason, but the main one was that three years ago we supplied some units to a mining company in the Gobi Desert, and from this we felt that there must be a market for well-engineered, robust equipment. We also had several other very good contacts in the country that were keen to enter the market with our products. As with all new business the only way to develop the trust required, is a visit and face to face meetings. So we said yes, lets go to Mongolia (its between Russia and China). A month or so later we were on our way to Ulaanabatar. Two flights later we arrived, a lot of construction and road projects in progress. But as with other parts of the world, many projects incomplete, probably due to the political uncertainty at this time. The roads were something of a first, though other

members of the mission remarked that they were not as bad as some countries they had visited. Initial shock faded as we noticed completed buildings and top of the range car showrooms. Many German manufacturers are establishing a good base in the country, there must be room for good quality UK construction equipment manufacturers. As with any trip, personal or business, the mix of people is an important factor and to our surprise we all bonded brilliantly. We even enjoyed the first night without alcohol, as the Mongolian government decided to make the first of the month an alcohol-free day! Joanna had organised trips to the local Ministries and talks with the Deputy UK Ambassador for Mongolia. They enlightened us with the current economic and political situations, well worth attending. Tuesday was the convention day for all to present their companies and products to potential Mongolian customers, a very nervous day for myself and Rob, as we have not presented to over 70 people before. All went well and Joanna said it was one of best supported events of this type she had WWW.CONEQ.ORG.UK

We were given a guided tour of the OT copper mine. A really exceptional facility, which to date had seen an investment of around US $4-5bn. However the balance of US $3bn was on hold and awaiting negotiations between the government and the mining company. In time the issue should be resolved, but for the time being the gold remains below ground. A Yurt was our hotel for the night in the Gobi, a top quality octagonal tent with a double bed, shower, toilet and a resident desert mouse. Others had spiders. Thursday we took the desert road to the UHG coal mine, probably one of the most enjoyable but uncomfortable mini bus journeys of our life. During the trip we saw a desert fox, gazelles and many camels and as we got closer to the mine, lorry after lorry full of coal. We arrived for our tour of the UHG open cast coal mine. This has been established a lot longer than the OT mine and even has its own school and town. All very well set up and impressive. Again an excellent tour of the facility and the workings of the coal mine and then a ‘WOW’ moment for us, as we discovered one of our Brendon Bowserwashers on site. Time for a photo shoot with the machine and then the return trip back to the Yurt at the OT mine. Friday was our last day in Mongolia, we had a few more meetings with customers and potential customers, then a last drink at the Embassy to catch up with some of the people we met at the start of the trip. This was a great first mission for us with the CEA and Joanna. It will certainly not be our last.

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