SPECIAL FEATURE: Construction growth
The market is growing and June was the busiest month in terms of policies being underwritten for small commercial cases that we have seen historically. We’ve seen a steady flow of new opportunities being both quoted on and closed since the start of 2015 with quotes up 60% on small commercial projects.
SMEs are showing signs of increased activity, particularly in sectors such as student accommodation, logistics and distribution businesses and small local convenience stores. We’re seeing a real snowball effect from the larger commercial projects in both the City and its regions and this is really encouraging for SME’s. As with all trends, this will bottom out eventually but there is no reason to think that we won’t continue to see this strong uptake and optimism gathering pace over the next six months. When we see positive investment from small enterprise businesses, this is generally a sign of more positive things to come from the rest of the UK economy as confidence resumes.
The election at the beginning of May played some part in the slowdown of activity as businesses awaited the outcome before making any significant business investments. Now that the economic forecast is more certain and with banks lending more, small businesses will be taking the opportunity to take on new, sometimes larger premises, to accommodate a growing workforce. Much of this has been occurring within the M25 corridor but we are now starting to see signs of increased activity creeping up towards the Midlands in Manchester and Leeds.
Latent defects insurance has been steadily earning its place in the construction sector since the recession hit as developers and business owners realise its value in terms of protecting their assets, it’s a simpler and better option than collateral warranties. Property will be one of the biggest outgoings for any business, second only to staff costs, so it’s important that any business owner takes steps to ensure that their livelihood is protected should defects in the building occur down the line. A busy business owner does not have the time to chase the original builders to fix the problem and therefore enjoys the reassurance that a latent defects policy offers, insuring the building and not the builder.