With an increasing number of firms seeking to acquire new technology Terry Lloyd, Head of Construction Finance at Paragon, shares his thoughts on the year ahead for the sector and provides insight into what SMEs should be considering:

How do things look for the construction and demolition sectors in 2023?

Construction and demolition have long been recognised as bell weathers of how the economy is performing and we have seen a strong start to the year. I recently visited a site of a longstanding client where several assets we had funded were hard at work. Talking with them about the uptick in business they were enjoying, and seeing new equipment put to use, was a real confidence boost that the economy was starting to turn the corner.

Businesses are now looking to the future and are determined to make 2023 a year of progress; conditions are stabilising, supply chains are set to keep improving, and SMEs are keen to start replacing or acquiring equipment.

It will be great to see the progress the sectors will have made in the first half of the year when we attend and have a stand at Plantworx in June. It is through listening and learning from suppliers, manufacturers, and clients that you gain the best understanding of how things are progressing and how we can help.

From what you are seeing in the market, what should SMEs be thinking about?

With improvements to the economy and the improving availability of assets, SMEs should be thinking about the equipment they need and start the process of putting financing in place. The later a company waits to secure financing and place an order, the greater the risk that it may not be available on time. After three years of uncertainty, an increasing number of businesses are looking to upgrade their fleets – but many will be doing so at the same time.

Supply chains will continue to improve and an increasing number of assets will come onto the market, but if the demand all comes at the same time then supply will become a factor. This is why it is important for SMEs to not put off placing orders they know they will need to make. The Paragon team understands this situation and we are ready to get help businesses find the right solutions and help ensure they can get hold of the equipment they require.

Sustainability is an issue that continues to grow in importance. How do you see it developing within construction and demolition?

Attending this year’s Executive Hire show it was clear that more and more suppliers are developing electric alternatives for what have been diesel dominated assets, but there remains a gap between what battery can deliver and the desire of construction and demolition SMEs to move towards more sustainable technology.

While we wait to see how the size, efficiency, and availability of batteries will improve we should continue to look at which other alternative fuels will become more readily available. Hydrogen is one option that is increasingly on the minds of both customers and suppliers – and we can’t wait to start working with SMEs to add a range of sustainable assets to their fleets.

How can Paragon support SMEs looking to finance their operations in 2023?

Understanding that each business is unique is key to the way we operate. While all will face national and global challenges, such as energy prices, they will also have individual plans on how they wish to expand, the work they undertake, and how they run their operations.

This means you can’t take a One-Size Fits All approach to developing funding solutions and why getting to know a business and the people involved is vital. They will be passionate about the businesses they run and will know it inside and out. By working closely with them, understanding their needs, and delivering bespoke solutions, we can both help them grow and support the wider economy through increased activity.

Visit our website to learn more about how our Constuction Finance team can support your business.