BCU 2019/The story of the Competition

Period 5


PERIOD 5:  "'Elite' live up to their name as the early leaders"

After some effective trialling the Birmingham City University Enginuity 2019 competition is underway, with a field of 7 teams all battling for supremacy against their peers. And so to the early action, and the early pacesetters after 25% growth are "Elite Construction" with 1,250 pts, living up to their name, at least for now. However the early leaders cannot relax as the chasing pack are close behind, with "Greenfield Construction Limited" in second followed by "Progressive construction Ltd" in third, and there are sure to be plenty of twists in the weeks ahead as the journey through the Early Years unfolds.

The early signs are that the competition will be very competitive, with all the teams improving their overall position in period 5. However, this was not unexpected. After being formed at the beginning of period 1, overhead costs were incurred whilst the companies were being established, without any profits being generated. The companies were now in a position to generate profits against a more stable overhead base, and this was reflected in improved operating profits. Of course, growth will be impossible without an effective strategy, and all the management teams have had time to think about this carefully, and come up with a set of objectives to deliver business success for their stakeholders.

Looking in more detail at the world economies, in the UK during 2018 fears over a no-deal Brexit saw the pound fall against other world currencies, particularly the dollar and the euro, as Theresa May continued to struggle to gain support for her plan for Britain leaving the European Union. The Bank of England raised interest rates during August to the highest level for more than nine years, from 0.5% to 0.75% per cent, signalling that the era of ultra-cheap money is ending, and the BoE governor Mark Carney also made clear further hikes are in the pipeline. Chancellor Phillip Hammond announced in the October 2018 Budget that the Office for Budget Responsibility (OBR) do not expect the economy to grow significantly until 2021, after growth of 1.4% in 2018, with projected growth of 1.6 per cent in 2019. For the Construction Industry this could lead to a continued period of uncertainty in the short term, although from mid 2020 onwards it is hoped there will be a steady rise in the volume of new work, although margins are expected to remain tight, and there is expected to be an increase in competition for work as more companies rejoin the construction sector, and there will be more demand for project managers and skilled labour, with the latter already being in short supply.

Further afield, and unlike the UK, the Global economy grew quicker during 2018, at 3.6%, with 3.9% expected in 2019, but according to the International Monetary Fund the expansion appears to have peaked in some major economies in the euro area and Japan, and among emerging market and developing economies, growth prospects are also becoming more uneven, amid rising oil prices, escalating trade tensions, and market pressures on the currencies of some economies with weaker fundamentals. However, in the United States momentum is strengthening, with President Trump promising to increase economic growth to 4 percent, although many economists feel that is faster than is healthy. For the Construction Industry growth is expected to be strongest in the energy and renewables sector, and the Qatar 2022 FIFA World Cup is also expected to continue to generate new opportunities in the Middle East.

League table at the end of period 5