Self-employed set to benefit as construction industry grows

Thursday 5 November 2015

October brought strong output growth in the construction industry, a major employer of independent professionals and contract workers.

The latest CIPS/Markit UK Construction Purchasing Managers' Index (PMI) revealed that the encouraging performance was driven by the fastest increase in new work for a year.

According to IPSE, the freelancer membership association, there are almost 2.3 million people working in the construction sector, almost 800,000 of whom are self-employed.

The October PMI indicated the quickest rate of job creation for almost a year, while business activity continued to accelerate in all three construction sub-categories.

Commercial building was a key driver, growing at the fastest pace for eight months. Housing and civil engineering continued to expand but at a slower rate than in September, a month that saw housing activity growth hit a 12-month high.

One of the most encouraging current trends for construction companies and contract workers is the steady supply of work, with October 2015 delivering the steepest increase in new projects since the same month last year.

The industry benefited from new contract wins from private and public sector clients.

Responding to the findings, David Noble, group chief executive officer at the Chartered Institute of Procurement and Supply, said: "With sustained growth now for two-and-a-half years, respondents reported more confidence in the sector and from clients, and an expectation of an even stronger performance next year."

This positive outlook bodes well for self-employed professionals and contractors, who remain an important and valuable resource for the construction industry.

One of the advantages for construction companies using these workers is their ability to work on a flexible, project-by-project basis, eliminating the need to pay full-time staff whose skills might not always be required.

Professor Andrew Burke, a member of IPSE's Construction Policy Advisory Committee, published a report called 'The Economic Role of Freelance Workers in the Construction Industry', in which he argued that the self-employed often play a key role in getting construction jobs off the ground.

By offering specialist skills whenever they are needed, freelancers can facilitate phased construction of units, meaning less financing is needed for the early, high-risk stages of a project, when investors might be reluctant to put up a large amount of capital.

"If the project proves viable then follow-on stages of finance are less risky and hence cheaper and more readily available," Professor Burke explained. "If the project proves to be unviable then the use of staged finance minimises financial loss and increases the ability to embark on alternative ventures."

IPSE launched the Construction Policy Advisory Committee in September this year, with the aim of pushing forward new research and policies to support people working independently in the sector.

The committee, which is composed of experts including representatives from 'big four' professional services firm Deloitte, held its inaugural meeting on September 10th. It discussed issues including tax simplification and the shortage of skilled professionals in the construction industry.


By Victoria McDonnell

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