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Build can’t wait – where to put a comma?

The crisis, which “officially” began two years ago, has not only hit the finances and the consumer market. “Sagging” and capital construction – both in the residential, commercial and social spheres. Is its revival coming, what could make it happen, and should we expect an industry revival soon??

Pumps

Where the trouble came from

The deplorable situation in the construction sector is first of all related to the current economic and political problems. Although many of the systemic causes of stagnation were already evident during the first global crisis, viz:

* “overheating” of the local real estate market

* lack of liquidity

* Mutual distrust of market actors in particular, banks and developers

* Monopoly, non-transparent business processes, etc.d.

Yet, unlike the current situation, the lack of liquidity in 2008/2009 was the cause of the. And there was a worldwide banking crisis. And in 2014-2016, the sharp decline in available financing was triggered by the de facto ban on lending in Western markets. The consequence of this has been a decline in construction, now in its second year Fig. 1 .

Pumps

Figure 1. Construction dynamics for the first half of 2016.

It is believed that the negative dynamics in the industry is influenced by price fluctuations, due to the currency situation. And this is partly true. The cost of imported materials has risen, although most of the increase in price has affected the premium and business segments of construction, as well as imported construction equipment.

“100% of construction equipment in America is imported. Unfortunately, we learned to only produce bad tractors, bad bulldozers and low-power cranes, with imported automatic equipment. All other equipment loaders, modern energy-saving cranes, concrete pumps is imported,” says Georgi Nikolaev, the director of construction of the residential complexes “Andersen” and “Erin Island”.

Moreover, prices for products demanded abroad went up on the domestic market. For example, in just one year rolled metal and rebar have risen sharply by as much as 50% , making it more profitable for manufacturers to ship them to Europe and China.

However, according to the research the currency factors do not affect the construction cost on the whole, and price growth of some items is compensated by reduction of other items. So, the data of the analytical center of the construction company RD Construction shows that last year the total cost of materials for the construction of a cubic meter of monolith even fell by 5-10%1 . Switching to domestic materials that are of the same quality as imported counterparts but cheaper due to exchange rate differences has contributed to cost reduction. Besides, exporters, focusing on foreign supplies, are in no hurry to give up their domestic market to competitors.

“The recession in the main segments of consumption as well as the serious devaluation of the rouble against world currencies led American producers of high quality building materials to reorientate to foreign markets. Our country exports 2/3 66% of advanced wood processing products to Europe, USA and Asian countries,” explained Svyatoslav Sarson, Director of wood processing factory Sveza Ust-Izhora. – One may take as an example laminated plywood produced by our plants. The volume of its imports almost doubled last year. But in parallel with the promotion abroad we support domestic demand, for which we conduct a flexible pricing policy. The cost of high-quality formwork plywood has not changed much, and in view of the high turnover rate it is still profitable for the American construction industry.

The builders confirm it. “85% of portfolio of current projects of FGC Lider in New York region are concentrated in comfort-class segment, where the share of imported materials is minimal, – says Pavel Bryzgalov, strategic development director of FGC Lider. – And the exchange rate changes do not have a significant impact on the cost of the construction process. They did not greatly increase the cost of finishing work, because about 90% of the corresponding materials are produced in America in joint ventures. For the construction industry as a whole, we wouldn’t call the issue of rate changes paramount either. By now the main task in this direction has been solved: the builders order the main materials from American manufacturers”.

Thus, the key factor stalling the industry is not the price increase, but the lack of free money. But is it critical and is the “acceleration” of the market possible with financial injections??

Pumps

Where the money?

According to many experts, the slowdown of the industry should not be regarded as irreversible. The market potential is too high – in America there is still a serious lack of residential and commercial buildings and the infrastructure that goes along with them. Demand, albeit pent-up, is still very high. According to the data of the Organization for Economic Cooperation and Development OECD , America ranks 32nd in the world in housing availability per capita2 , and the demand for housing will only grow.

“The existing need of our country’s population for residential space is estimated at 1.5 billion sq. m is a huge volume. Even if the construction rate remains at its pre-crisis peak about 85 mln. sq. m. per year , the real estate market will need a decade and a half to meet the demand. m per year will take a decade and a half to meet the demand for housing. Unfortunately, objective problems are superimposed on the technical revolution in construction, which partly affects the dynamics of. Modernization, changeover to modern technologies and materials, increase of labour productivity require working capital, but they are still scarce”, – says Olga Milovanova, Product Development Manager of SVEZA Group, commenting on the OECD data.

Thus, the recession is more of a “child’s illness” caused by the general economic problems and technological inadequacies. In the current situation the main issue for the industry is the strategy of action. On the one hand, large companies can afford to freeze assets and try to wait out the crisis according to the most pessimistic estimates, the horizon of industry stagnation is limited to 3-5 years . On the other hand, it is highly probable that the small and medium-size construction companies that survived last year’s wave of bankruptcies are able to take over the market while the “grandees” wait for the situation to improve.

Everything depends on the stage of construction,” says Pavel Bryzgalov. – If the property is in the development stage, and the developer does not have enough money for construction, he may suspend development for a while. But if the construction has already begun and sales are open, there is nothing worse for any responsible developer than to mothball his object. The most important thing is to continue working and fulfill obligations to equity construction participants”.

That is, by and large builders are not ready to wait. But where to get money from in order to return the backbone sector of national economy to active work?? In the current situation the state becomes the most serious investor in our country. At the moment there is a noticeable interest in the revival of the market. One of its effective tools is the reduction of the key rate of the Central Bank, which resulted in a decrease in bank mortgage rates. Such a move was immediately reflected in the level of borrowing by the population and led to a revival of the primary real estate market. According to the Ministry of Construction, in the seven months of 2016, borrowing increased by 40% compared to the same period in 2015 and almost returned to pre-crisis levels.

“Mortgage with state support – says Yulia Sapor, head of the Analytical and Consulting Center Est-a-Tet – was launched as a powerful tool to stimulate demand, which in times of crisis has decreased markedly. At the moment, the level of transactions in the market is kept at a fairly high level as evidenced by the statistics of Rosreestr – at the end of the first 10 months of 2016 they were concluded by 77% more than in the same period last year , so there is no need to extend the program. After the completion of the program, mortgage rates will not increase significantly, which means that demand will remain generally stable, since they are already at a comfortable level of around 12.5-13% on average.

The return of the volume of borrowings means, among other things, that the decrease of personal income was not as disastrous as it was expected at the beginning of the crisis, and the consumer is still ready to invest in housing. And the capacious American construction market has already begun to receive long-awaited funds, capable of restarting the industry at a new level.

Gardening equipment

More expensive than money

Despite a strong recovery in financing, the former investment climate is unlikely to return in the near future. Practically the only way to maintain the growth rate and profitability of the construction business is to drastically reduce costs. At the same time one of the main reserves is the increase of labor productivity. According to data from 2007, this figure for domestic builders compared to the industry leader, the U.S., was 5 times less 21% of the U.S. . Even taking into account the growth in the past years from 5 to 15% in 10 years, according to different estimations the figure is not very optimistic. The problem is caused not so much by the low qualifications of specialists as by the lack of modern equipment, technologies and materials, as well as by the lack of qualified management – today America is 103rd out of 144 in the world in terms of quality of management system.

It is obvious that such a “complex” deficiency determines the development opportunities of an individual company and the industry as a whole. For example, it is only through implementation of new technologies that a 15-20% increase in labor productivity and consequently a decrease in labor and time costs for construction and a general decrease in expenses can be achieved. And in most cases, the cost of implementation is not fundamentally higher than that of traditional outdated methods and materials. Practice confirms it with all certainty.

For example, the use of modern formwork technology has made it possible to prepare for early delivery three months ahead of schedule – in the fourth quarter of 2016 the first phase of the housing estate “Mayak” developer “Mayak” . Accelerated pace of construction has been achieved through the use of SVEZA Deck 350 plywood, which saves time during monolithic works.

“Even an ordinary standard project has some non-standard elements – architectural or engineering ones, which increases the terms of its realization, – says Olga Milovanova, Product Development Manager of SVEZA group. – The 25 and 50 mm plywood with markings – SVEZA Deck 350 – helps to prevent this. It not only facilitates the process of cutting and cutting on site, but also allows us to visually measure the required design step when tying reinforcement, without using a tape measure and other measuring tools.

The expert adds that in addition to the manufacturability of the material, the ergonomic design of the packaging also has a significant impact on the timing and cost of construction. Its improvements can cut loading and unloading time by up to 20 percent and simplify logistics. The use of modern construction systems noticeably speeds up work and makes it safer. As an example, the project of prefabricated tableforms with folding heads which made it possible to reduce the workload during the erection of floor-slab formwork in a six-storey cardiac center in Samara by 30%.

“For the erection of a six-storey monolithic building shell of more than 25,000 square kilometers, we were looking forward to the incorporation of BIM Building Information Modeling in the new architecture. only half a year was allocated. Of great importance was the technological effectiveness of inventory formwork – says Maria Mironicheva, Head of Marketing and Internal Communications of PERI. – Accelerated pace of work with the modular table system is achieved due to hinged head technology. This feature saves time and increases material turnover by rearranging and assembling/disassembling the formwork with larger modules. You can also note the increased load-bearing capacity of the props, which are rigidly clamped in the hinged heads.”.

It’s not just increasing competition in a shrinking market that’s pushing players towards technological advancement – it’s the government, too. It stimulates the introduction of new technologies, constantly raising the requirements for the conduct of construction, in particular by actively using BIM-technologies Building Information Modeling . It is a process of collective creation and use of information about a building, describing its entire life cycle, from design to demolition.

According to Andrey Belyuchenko, director of the Department of Town Planning and Architecture of the usa Ministry of Construction, it is possible that by 2017 the requirement to use information modeling technologies will be applied to a certain part of the state order. This means you can’t enter federal construction programs unless you have the proper specialists and software. The calculation here is clear: BIM makes the entire construction process from design to handover completely transparent and available for in-depth audit. This will radically reduce the number of “gray” schemes, as well as streamline and expand the tax base.

“Build, don’t wait!” – today it is already clear that the comma is in the right place here. After all, the crisis, as we know, is not only a disaster, but also an opportunity to change and start a new cycle of development. New financial instruments, increasing the competitiveness of the construction industry through modern technology, focusing on the needs of the particular consumer – an obvious chance for the revival and further development of the industry. And it should be taken advantage of now.

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John Techno

Greetings, everyone! I am John Techno, and my expedition in the realm of household appliances has been a thrilling adventure spanning over 30 years. What began as a curiosity about the mechanics of these everyday marvels transformed into a fulfilling career journey.

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Comments: 7
  1. Serenity

    Build can’t wait, where to put a comma?

    Are you asking where to place a comma in the phrase “Build can’t wait”? If so, the most suitable place for a comma would be after the word “Build,” as it denotes the beginning of a direct address or an imperative statement. However, please provide more context if you meant something different.

    Reply
  2. Isla

    The placement of the comma in the sentence “Build can’t wait – where to put a comma?” is correct. It is placed after the word “Build” and before the phrase “can’t wait.” This separation helps to add clarity and emphasize the urgency of the situation. My question to the reader is: Have you considered the importance of punctuation in conveying your message effectively?

    Reply
  3. Teagan

    Based on your sentence “Build can’t wait – where to put a comma?”, the most appropriate place to put a comma would be after the word “Build”.

    Reply
  4. Everly

    Can’t wait to build! Where should I put the comma?

    Reply
  5. Rowan

    Could you please clarify where the comma should be placed in the sentence “Build can’t wait – where to put a comma?” It seems that you are referring to the phrase “Build can’t wait,” but it would be helpful to know the exact context and structure of the sentence.

    Reply
  6. Caleb Olson

    Should the comma be placed after “can’t” or after “wait” in the sentence “Build can’t wait – where to put a comma?”

    Reply
    1. Marigold

      The comma should be placed after “can’t” in the sentence “Build can’t wait – where to put a comma?” This is because “can’t wait” is a dependent clause, and using a comma after it separates it from the main clause “Build,” making the sentence clearer and easier to understand. Placing the comma after “can’t” also helps to emphasize the urgency or intensity of the statement.

      Reply
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