So with the planning concerns ticked, and with the Made Partnership’s capital and construction needs in the bag via the other two partners, the joint venture is better placed to succeed than some of the naysayers may believe.

However, sitting in the heart of the supply chain, looking at the social and economic environment into which the Made Partnership is launching, it will be interesting to see how it navigates the remaining – and not insignificant – strategic challenges facing the UK’s housebuilding sector as a whole as well as this new initiative.

Trade Skills Shortages

Trade skills shortages, both current and forecast, require rapid and significant investment in training and apprenticeships, with the Trade Skills Index forecasting the need for an additional 34% of apprentices to be trained by 2032. Aside from the investment needed, there is much to be done to make core construction trades look like an attractive long term career choice, for women as well as men.

Supply Chain Stress

Aside from skills shortages, the construction supply chain is still dealing with the economic stresses of the last three years, during which time 10,680 companies in the sector have closed their doors forever in the face of demand swings and ensuing negative cashflows.

Professor Noble Francis (Economics Director at the Construction Products Association) estimates that the supply chain will need to be operating above 90% if the sector is to meet government housebuilding targets.

However, a significant number of supply chain specialists have closed or mothballed factories and are facing the costs of restoring full operational capacity, adding pressure to already-stretched cashflows and credit rating challenges. This is not insurmountable but must be carefully planned for to ensure the UK can get back to building at scale.

Demand

Perhaps the most interesting aspect here is demand. As part of the construction supply chain, we are seeing small and welcome improvements to demand as interest rates have passed their peak. Interestingly, according to Zoopla, the stock of homes for sale is at a 7 year high.

However, affordability remains a real issue in a market where, since the mini-budget in 2022, significant inflation has raised the cost of living dramatically and financial confidence in the future has held back demand. While interest rates have peaked for the moment, they are unlikely to return to recent lows, and the ending of the Help to Buy scheme has crippled the ambitions of many first time buyers. Anecdotally, some builders will tell you that their time to sell has shifted from 40 days to 110 since the mini budget in Nov 22

In summary

Anything that contributes to the long term sustainability of the UK’s heavily bruised housebuilding sector is, of course, welcomed by the supply chain. Could this be a game-changer in terms of meeting housebuilding targets? With the right support, yes.

Major long term commitment to large scale construction should also help to resolve the attraction of construction as a career choice, so may also prove to be a first step in dealing with trade skills shortages providing there is sufficient investment in training.

As part of the housebuilding supply chain, it is heartening to consider that we may see supporting changes in the October budget around increased public investment in affordable housing. At the same time, maybe the restoration of stimulus and support for first time buyers.

Combined, these measures could start to resolve some of the factors holding our sector back.

James Scott