2015: a year of unpredictable opportunity

Nelson Ogunshakin
14 January 2015

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The UK General Election, a falling oil price and the emergence of Africa as a major market mean this year will be full of uncertainty and challenge but in a good way, says Nelson Ogunshakin.

As I look forward to 2015, my big hope for the industry this year is that the global market is managed carefully and becomes more predictable.

While it is challenging, it’s not too difficult for the industry to navigate. However, uncertainty will likely affect the corporate world as there will be a lot of changes internationally.

Further consolidations are expected across the international frontier. We already know the political landscape will likely change, particularly in the UK with the General Election fast approaching. So the impact of these on the industry is something we need to prepare for.

"The pressure points of production cost  in Asia and challenging working conditions in Middle East make Africa the last frontier for foreign investment. We have now reached a point where African talent, who have been trained abroad, are returning home to make a difference"

There’s an air of unpredictability about this year’s election. Whereas regional devolution will be a main focus for all parties, I also see infrastructure policy featuring prominently.

The industry will be looking closely at politicians to gauge their core message because, at the moment, there isn’t a cross-party agenda on infrastructure investment. The reason I feel the subject of infrastructure is important is simple. We have just been through a global meltdown, which lead to the biggest recession in recent memory and now the UK has started to pull away from mainland Europe in terms of recovery.

If that growth is to continue, investment in infrastructure will be key to improving the economy. I believe the position of the leading political parties on this matter will form the bedrock of their campaigns.

There are also a number of programmes within the industry that will, hopefully, continue to move forward unimpeded by the election campaign. For instance, it is imperative that momentum gathered for the HS2 Hybrid bill continues to gather pace as it enters a critical phase.

The Sir Howard Davies Aviation Review, due after the election, will be crucial because of what it means for aviation capacity in the UK. Thames Tideway Tunnel, Hinkley C and creation of Highways England are all equally vital.  

The Government Construction Strategy has set aims to have in place BIM in all public sectors by 2016, so we need to make sure the UK is ready for that. These are all big issues I feel will drive the industry forward in 2015.

But let’s again turn to the global market and how things will unfold on the international stage. If you study the GDP of the world’s largest economies, the US and UK continue to grow, albeit at a slower rate. Mainland Europe continues to struggle because of the disparity in growth in the north and south. But the biggest GDP growth is in Africa, the Middle East and Asia, and that is where the opportunities lie.

The question now is: What sort of impact will that growth have on the market oil price? If you are a country exporting oil the lower its value becomes, the less disposable income you have towards infrastructure.

However, if you are importing oil then the cost of production becomes more feasible. The pressure points of production cost  in Asia and challenging working conditions in Middle East make Africa the last frontier for foreign investment. We have now reached a point where African talent, who have been trained abroad, are returning home to make a difference. If you look at countries like Ghana, Nigeria, and Uganda there are numerous activities taking place in the infrastructure development, manufacturing, oil and gas industries.

So what does that mean for UK plc? Increased activity in Africa, Middle East and Asia will lead to global demands for consultancy services. This is something the UK should take advantage of and is strategically well placed to do so.

As for ACE I hope we stay focused on our core strategy and continue to stay relevant. At the same time I hope we stay dynamic enough to respond to an ever-changing industry. We need to support our members, both small, medium and large at the appropriate level. As devolution beckons, we continue to strengthen our regional activities.

With the National Conference in March, followed closely by the election, this event will provide the perfect forum for debate on infrastructure policy. All in all, we are ready for 2015, and I’m confident ACE will be a strong advocate for the UK engineering and construction sector helping it become the leader, if not the best in the world. 

Nelson Ogunshakin is chief executive of ACE