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How to Save Materials on Your Building Site and Improve the Bottom Line

In an uncertain economic climate, an effective waste management strategy can help your construction business cope with tricky trading conditions.

The uncertainty that has dogged the UK economy since the public voted to leave the European Union has impacted the construction sector more than perhaps any other British industry.

Initially, the most significant problem facing builders was the sharp decline in the value of sterling that immediately followed the Brexit vote. Against the likes of the dollar and the euro, the pound lost around 10% and has suffered further falls since – this currency weakness has pushed up the prices of imported materials and had an instant impact on construction firms’ margins.

Matters getting worse

But matters have, if anything, deteriorated in recent months. The dip in sterling has fed through into widespread price inflation which is no longer confined solely to exports. According to the Office for National Statistics, the Consumer Price Index rose to 2.9% in August 2017, well above the official Bank of England target rate of 2%.

Nor are rising prices the only impediment to business investment and household spending – the ongoing lack of clarity over Brexit negotiations, in particular what the trading relationship between Britain and the remaining 27 EU member states will look like, has created an extremely uncertain economic climate.

Employers’ organisation, the CBI, has recently warned that investment by UK companies has decreased because firms are unsure about the future they face. For the construction sector, these issues are particularly pressing as they mean that businesses are more likely to put major projects on hold – if they are not abandoned altogether – while households are equally reluctant to commit to significant levels of spending due to the current climate.

Recent data shows just how grim the situation has become. According to figures published by analyst IHS Markit, activity in the UK construction industry fell for the first time in 13 months in August 2017. The month-on-month fall in work on commercial development projects was the second most severe since February 2013, while new business volumes were down for the third month in succession. The report stated that firms in the industry attributed this downturn to “fragile confidence and subdued risk appetite” among their clients.

Materials price uncertainty

Unfortunately, while the UK faces a March 2019 deadline to conclude the Brexit negotiations, there has been a marked lack of progress so far – and so this uncertainty seems set to continue for the foreseeable future.

For construction firms which already have projects underway, this can create further problems. The type of currency fluctuations we have seen in the past 18 months are likely to carry on, with sterling rising and falling in response to politicians’ speeches, news reports and economic data.

This means that companies are having to cope with increases in materials costs beyond the levels they have quoted for. In some cases, contracts are being structured in a way that means any extra burden is shared with the client. But many businesses may be unwilling to risk their relationships with customers and will instead resign themselves to shouldering any and all additional costs.

In July 2017, the Federation of Master Builders said that 10% of firms reported making losses on projects due to price rises. Naturally though, ambitious businesses in any sector are unlikely to simply sit around bemoaning their luck – the most successful construction firms over the next few years are likely to be those that tackle the problems described above head on.

Managing your resources effectively

A key part of this is maintaining, and perhaps even improving, your bottom line by keeping a tight grip on your company’s cost base. This is where effective materials and waste management play a crucial role – the financial pressures construction firms are facing mean they can no longer afford to be wasteful when it comes to using materials or disposing of what they no longer need.

So what are the most important aspects of effective waste management, and how can you make sure you are reclaiming building materials efficiently?

1. Get your segregation right

Ensuring that different types of waste material are kept separate is a good starting point for firms looking to keep a lid on waste disposal costs. Effective segregation means that it will be easier to identify materials that can be recycled, and it will help ensure that the volume of waste sent to landfill is kept to a minimum. In addition, if waste is sorted on an ongoing, automatic basis as it is generated, it can reduce the time needed to sort excess materials at the end of the project.

2. Get your suppliers on board

Working with suppliers which offer ‘take back’ schemes is a particularly good way of ensuring you aren’t left with large amounts of surplus materials. The right suppliers may also offer ‘just-in-time’ delivery, where the materials you need are sent to your sites only when they are needed.

You can also try to work with suppliers to minimise the amount of packaging they use.

3. Face up to red tape

No one enjoys keeping paperwork, but for larger projects in particular, accurately documenting the materials you use, as well as those which are surplus to requirements, can have long-term benefits when it comes to identifying any areas of concern, complying with sustainability schemes, or even demonstrating your own good practice in future tenders.

4. Aim for future reuse

When considering what type of materials to use on a project, favour those that could potentially be reused elsewhere – either by your own firm or by a business you have an existing relationship with. Reclaiming building materials in this way can have a significant impact on your bottom line.

5. Understand the importance of reliable storage

Factors such as the weather or theft can result in you losing valuable materials from a site. Ensure that your approach to materials storage is more than adequate – that means areas are secure and weatherproof at the very least.

A proactive waste management strategy can help your firm address any cost issues you have been facing as a result of the current economic climate – and put it in a great position to enjoy sustained success as conditions improve.