The Economic Situation Of The Construction Industry


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The Construction industry is very important to the UK’s and indeed to the world’s economy. In the UK, it accounts for more than 10% of the country’s gross domestic product and employs an estimated 2.5 million people. In the last three years, an extra 33 billion has been made available to this sector to increase public services. Included in this figure are major investments in transport, health and housing. As the industry is investment-driven, it is subject to the strictures of economic upturns and downturns; during the recessions of the mid 1980’s and the early 1990’s, there were significant downturns. However, in the late 1990’s, there was a marked swing in the opposite direction.

Our construction industry, by very nature of its geographical location, is not subject to the full influences of cross-border competition that are in evidence in mainland Europe. However, construction industries worldwide have been affected by the current economic climate and the increasing rise in fuel prices. For the earlier part of 2008, the German construction industry showed a marked upturn, but this slowed and tailed off later in the year, due to the increase in oil prices and the slowing economic pace of many industrialized countries. In addition to economic factors, there is a turn in the tide of ecological factors. In America, the number of people citing Global Warming as the most important environmental issue rose from 11% in 2003 to 35% in 2006. The construction industry faces new challenges in replacing and renovating buildings with minimal environmental impact. At the same time, the cost of these precautions has to be measured against potential profits.

However, despite the factors that seem to be conspiring against it, the construction industry moves at a very fast pace and is an ever-changing entity. Whilst legislation is forever altering, new techniques, technology and methods are developing to keep up. With the development of new practices, new jobs in construction are perpetually being created. In the UK, the Home Office has released figures stating that the three Construction Jobs that are most lacking in applicants are those for transportation and highways engineering, ground engineering and contaminated land specialists. With major infrastructures and building developments taking place in the South East of the UK, such as the 2012 Olympics and the Thames Gateway regeneration, construction recruitment in this area is set to soar. Britain’s Olympic Games will have 30 venues and a budget of 2.3 billion. It also has a non-negotiable, absolute completion date. As that date draws nearer, the construction industry will find itself heavily in demand as pressure and expectation rise. 2012 promises to be an important year for this industry and many are looking upon it as a chance to showcase its talents.

Of course, construction takes place across the globe and this gives workers a chance to travel as well as work. Construction jobs require large teams of people all working to a common goal and, while the lifestyle can be quite temporary, many get used to it and find it a liberating existence. Some projects are short-term, whilst others can last for years such as the construction of an oil refinery.

Construction Industry Solutions � What Cis Can Do For Your Business

Pegasus Construction Industry Solutions is a piece of software specifically designed for the construction and allied industries. It gives you complete control over all aspects of contract management, costing, timesheets through to payment applications and VAT invoicing plus much more.

The construction industry suffers from severe cost overruns and finds it hard to work within a strict deadline, demonstrating that the need for an industry driven software is extremely overdue. This software is needed to ensure that tasks and construction projects are delivered on time and done so within budget.

Construction Industry Solutions conforms to the legislations that are set out by the HM Revenue and Customs, otherwise known simply as HMRC. One important function of Construction Industry Solutions is that the subcontracts ledger combines the function of the purchase ledger with the regulations and requirements of HMRC’s Construction Industry Scheme. This ensures that subcontractor payments can be entered and when the payment is approved it is possible to produce a payment certificate, which can be sent to the subcontractor along with payment.

One thing that needs to be kept in mind however when it comes to Construction Industry Solutions is the new legislations that are now in place regarding tax returns. The main aim of changing the legislation when it comes to the construction industry is to encourage companies to submit their tax returns online. This comes as a disadvantage to the construction industry as systems and software will need to be updated to conform to the new legislations. These changes are as follows:

�CIS Cards and Certificates will no longer be used, instead contractors must verify that any new subcontractor is registered with HMRC. This can be done online.

�Subcontractors will still be paid net or gross of tax, but HMRC will specify which, as part of the verification process.

�There is also a higher rate tax deduction of 30% that can be assigned to subcontractors if they cannot be matched to records on the HMRC system, as part of the verification process.

�Vouchers and Year End returns will no longer be required; these will be replaced with a CIS300 Monthly Return which can be filed online, on paper or as an electronic submission. This details payments and deductions made to all subcontractors. Even when there have been no payments made to subcontractors in a month, nil returns must be made.

�The CIS300 Monthly Return requires a declaration to be signed that states that the contractor has checked the employment status of each subcontractor, and that payments have not been made under contracts of employment.

�Most subcontractors that are registered under the existing CIS rules will automatically be transferred over to the new system and will not need to re-register.

�Failure to submit the CIS300 Monthly Return on time will result in a penalty being charged, based on the number of subcontractors on the late return. This penalty repeats for each month that the return is late. A late submission of a nil return automatically attracts a 100 penalty. HMRC also states that if the return is received back late, the contractor’s own gross status as a subcontractor may also be at risk.

Ten Tips For Staying Employed In The Construction Industry

Ever wonder why some in construction manage to work year-round while others seem to bounce from contractor to contractor? “What’s their secret?” you might ask. Are they just lucky? Perhaps, but there are some things you can do to even the odds.

Did you know that most Foremen know exactly who they are going to let go weeks before they ever hand out a pink slip? It’s a standard practice in construction to make a “Lay off List” with the names of the workers on a crew in order of production. Call it a “Head Count”, a “Lay off List”, a “Totem Pole”–call it whatever you like, but you’re on it. The real question is, “Are you on the top or the bottom”?

Often a Foreman will be told, “Lay off three workers” and given only a moment to make the decision. The names on the bottom are the first to go. You may not be aware that it’s a fluid list and that names move up and down as production increases and decreases.

By the way, your Foreman’s not the only one deciding who stays and who goes. It may be a Project Manager or even a customer that may see you leaning against a ladder and make a split second evaluation of your work ethic. It’s not fair. That’s for sure, but unless your reputation as a hard worker precedes you, it might be too late for anyone to step in and rescue you.

Some will work on many jobsites and somehow manage to miss the lay offs. Is it because they’re luckier than the next person? No. It’s just that they know the ten tips for staying employed in the construction industry.

1) Walk with a Purpose- Don’t meander around on a construction site.
2) Pack a Lunch- You’ll save money, be healthier and live longer.
3) Show up Everyday- You’ll outlast those who don’t.
4) Show up On Time- This one really pays.
5) Be Flexible- Be prepared to do a variety of tasks, even sweeping.
6) Update your Skills- Take industry related classes.
7) Be Reachable- Buy an answering machine or cell phone with voice mail .
8) Have Reliable Transportation- Buy the best vehicle you can afford.
9) Have A Positive Attitude- There’s no such thing as “can’t” in construction.
10) Look the Part- Dress like a professional tradesman.

Well there you have it; ten tips to staying employed in the construction industry. They may seem obvious, but if that’s the case why are so many workers caught in the rut of constantly being let go? If you’re fortunate enough to work with some of the best tradesmen in the field, you’ll notice that they seem to have these qualities. Consider yourself lucky. Not everyone has the pleasure of apprenticing with such professionals. If you follow these simple steps, you will stay employed longer, earn more money and avoid having to tell your family that the holidays are going to be tight this year. Still, it’s a good idea to save a little money for those slow periods.