Head of Designer Group Michael Stone is the CIF’s new President. He talks to Irish Building Magazine about juggling roles, sector challenges and why we should be proud of our construction industry.
The new President of the CIF is not short of ideas when it comes to reviving the industry. Michael Stone was elected the new President of the Construction Industry Federation last November and will serve as leader of the CIF Executive Body for the next two years. Along with acting as President, Michael is the founder and CEO of an electrical and mechanical contracting firm, Designer Group, so it’s fair to say he doesn’t have much free time at the moment. “The first couple of months as President were hectic but by focusing on time management, things have improved and I am enjoying the challenge.”
Originally an electrical contracting business, Designer Group was formed in 1992 by Michael. The firm branched into the mechanical sector in 2001 and in 2006 established its operations in the UK. “It was tough during the recession in the UK but now that we are in a growth phase, there is no shortage of exciting projects available to us. We are on a high growth curve in the UK and we see huge opportunities for us, particularly in the London and south east region. The big challenge we face in the UK is sourcing quality management to deliver the projects we have secured.”
The situation in Ireland is, however, very different. “The market here remains extremely competitive. If we go back to 2007 and take a list of the top 10 building contractors, you will find now that five of them are no longer trading. In the mechanical and electrical sector, all bar one are still operating. We have some very good companies that are our competitors and there is just not enough work for the players in the market at present however, we do feel that with some of the bigger projects due to come on stream in 2016, the situation will improve.”
Recent key projects delivered by Designer Group include the new brewery at St James’s Gate, the Olympic International Broadcast Centre for the 2012 games in London and the new Bioscience Facility for Trinity College along with new corporate Headquarters for Google, Amazon, Yahoo, Dropbox and Eaton.
Michael is well placed to take up the role of CIF President. He has served as President of the Electrical Contractors Association, ECA, and the Mechanical Engineering & Building Services Contractors Association, MEBSCA and has participated in most of the Federation’s sub committees over the years. “I know the challenges facing construction firms and specialist sub contractors, particularly those who are reliant on the domestic market and whose turnovers have shrunk as a result of the severe recession over the last seven years. Every sector has its own difficulties and that’s why it’s crucial that work is spread around the country and not confined to the capital and the larger cities. Government policy must be directed to bringing work to the regions.”
The recent announcement such as the €300 million investment in Local Authority housing is, says Michael, the sort of news the industry needs. “That type of work keeps smaller contractors around the country going. The school building programme is also vital for firms. I think there are huge opportunities with Irish Water; the requirements they have for the infrastructure upgrades with water treatment plants and replacement of pipework means regional contractors around the country will get an opportunity to win some work.”
In relation to the current housing shortage Michael believes there are a number of factors causing this, the main one being the acute lack of finance for house builders which prevents them from getting working capital together to commence building on their sites. Michael points out that many of these housebuilding companies are second and third generation operations who have built some fantastic schemes all around the country to the highest standards. “A further issue is quite simply that the market has not risen in most places to a level where it is financially viable for house builders to build new stock as the price in the market for second hand units is far cheaper than the cost to build new units.”
A lack of skilled workers to carry out projects as the market picks up will have serious repercussions for the industry, says Michael. “I firmly believe that as an industry, we have a duty to look at how we are training our people and ask where they are going to come from in 10 years’ time. We need to keep our talented and trained people working in Ireland and to do that, we need them working at the front edge of construction technology. Initiatives such as BIM and lean construction are crucial for us and the industry needs to embrace these technologies at all levels.”
The CIF is currently pushing Government to implement initiatives that will encourage firms to start hiring graduates and apprentices again but it’s an issue that needs to be approached in a different way, says Michael. “We need to be more flexible when it comes to the type of courses we are providing. We need to be looking at co-operatives for smaller companies so that they can share an apprentice or graduate to ensure that he/she can get through their training period. Maybe a small company doesn’t have the work to keep that person going for the length of their apprenticeship but if two or three companies get together, they can share the apprentice and get them through their training. If the apprentice issue isn’t addressed we are looking at a potentially massive brain drain, particularly when it comes to the wet trades.” Numbers are dangerously low in plastering, bricklaying, painting and decorating and wall tiling and companies working in these trades suffered during the recession. “They need the support of the CIF and there needs to be an understanding from Solas that these initiatives must happen as soon as possible. Northern Ireland and the UK have put in place programmes where the State takes on apprentices for the first 10 or 11 months to get them up to a certain level before employers take them on. It’s forward thinking initiatives and incentives such as these that are needed to kickstart our industry. If there are no training programmes in place, firms will simply sub out work which will, in turn, result in an industry unable to deliver projects in-house and when the market does pick up, which it will, we’ll be forced to recruit people from abroad to deliver our projects which is a very worrying thought when we have such a young and bright workforce available to us”.
When it comes to the issue of perception in the industry, the CIF President has strong views.
“In order to improve the perception of the construction industry, standards within the sector must be improved. Positive initiatives that go some way towards changing this include the new Building Regulations and the Construction Industry Register Ireland. The CIF is an advocate of the new Building Regulations but we’re also very concerned with any initiative by Government that would lessen or reduce those Regulations, particularly when it comes to one off housing. We feel that exemptions would have a detrimental effect on the industry and ultimately the customer.” A massive amount of work has been put into the establishment of CIRI, the only Register of construction companies, sole traders and specialist contractors that are vetted by Government nominees and industry professionals. “We want construction taken out of the black market once and for all. It is not good for our industry, it causes problems with wage levels and competitiveness in the economy”.
Michael acknowledges how difficult a task it is to change mindsets and to improve the industry’s reputation. “We know construction in Ireland has taken a battering but it’s important to remember the brilliant people working in our industry who have delivered such fantastic jobs right around the country. The sector has built world class facilities and that is what we want to be recognised for. It is so important that we have people who have a desire to work in our industry and who want to be a part of building these exciting projects for our clients to world class standards. There needs to be a strategic plan put in place by Government and stakeholders with a focus on the medium to long term so we can identify a range of projects that need to be delivered over the next 10 years with a better outlook for the industry which will result in us being able to attract the bright minds that we need to take the industry forward.”
According to Michael, there are still some people who see the CIF as the body that represents developers, some of whom delivered poor quality buildings and housing. “We need to be seen as the body that represents the construction sector, the body whose members build pharmaceutical plants, schools, hospitals, company headquarters, roads, bridges, tunnels and water treatment plants as well as housing and apartments.” It might be slow but Michael sees the industry’s perception as changing for the better. “There is no doubt it is improving but I do think we need to sell ourselves better. We have been lying down and taking a beating for too long. Most of our members are contractors who work on very low margins, typically around 3% in a good year. Our members have not made huge amounts of money at the expense of the Government or the people of Ireland. We have built and delivered projects that have allowed people to go to work, school, college and receive treatment in our hospitals. We should be proud of what we are achieving.”