Barratt Developments issued a trading statement today ahead of its full results presentation on 22nd February.
Like other house builders, Barratt has had a strong second half to 2016 with continued consumer demand supported by ready availability of mortgage products and ongoing government support for house buyers.
Profits are likely to be up 7% on H2 2015, forward sales are strong and there is cash in the bank.
The only apparent fly in the ointment is London, where completions are down, but that is largely due to Barratt scaling back activity in London where sales of £1m+ properties have slowed dramatically since the stamp duty changes at the end of 2014.
Outside of the capital, completions are at their highest level for nine years and Barratt's forward sales (excluding JVs) are up over 35% on the same period last year. With numbers like that, it's hard to disagree with the Barratt CEO's assessment that "The fundamentals of the market are robust."
While Barratt - like other large house builders - has plans for growth, the skills shortage is again cited as a key constraint. Barratt claims today to be the largest employer of apprentices in the industry, and congratulations to them for leading the way. But the skills shortage in construction hasn't come about overnight and the industry as a whole is suffering from an historic lack of investment in training and staff development.
And it's not just traditional building trades where there are shortages of quality people with the appropriate skills. As the house building industry tries to ramp up production to meet the demand for new housing stock, at Blayze Group we see a real shortage of the experienced commercial directors, project managers and senior quantity surveyors that are needed to deliver medium and large scale residential projects.
This is one reason for an increased demand for in-house people development programmes like Blayze Group's suite of bespoke Talent Management and Leadership Development systems that help to identify and nurture leaders within an organisation. Somewhat belatedly, many organisations are waking up to the value of developing talent in house rather than trying to recruit from a diminishing talent pool of in-demand people or constantly fighting to stop their own key people moving to their competitors.
While there will always be room for efficiencies and there may be some capacity for increased productivity through adoption of modern methods of construction, people will always be the most important part of the equation.
As all the large house builders look forward to a year of strong demand, it will be interesting to see which organisations rise to the challenge and manage the substantive increase in productivity that the country needs.
At Blayze Group, we're betting that the most successful house builders of 2017 won't be those with the biggest land bank or deepest pockets, but those who have invested the most in their people.