A recent report[1] commissioned by the UK Government paints a very bleak future for the long term future of the UK construction industry if the status quo does not change.

The report, subtitled ‘Modernise or Die’, identifies several problem areas within the industry including:

  • inadequate workforce size –

700,000 workers are required to replace those that are likely to be leaving the industry over the next 10 years, mainly because up to 25% of the workforce is expected to retire. On top of this, an additional 120,000 workers are needed just to deliver capacity growth.

  • low productivity –

Productivity in the construction industry has remained stagnant over the past 20 years, whereas the UK economy has increased around 30%.

The report promotes the use of pre-manufactured products in construction and even suggests that the UK could become a world leader.

  • lack of investment in innovation and skills training –

The construction industry has the lowest proportionate spend on R&D compared to other industries. In addition, there appears to be an inequitable distribution of the CITB levy which favours the larger employers.

One recommendation is for there to be an additional charge for end clients, being 0.5% of a project’s construction costs, to fund skills and innovation, but that such levy would not be payable if the end clients can demonstrate that they are contributing to the improvement of the construction industry for example, by supporting skills development or pre-manufacturing facilities.

Analysis

It remains to be seen how different parts of the UK will be affected if the industry is not able to recruit new entrants, particularly in London following ‘Brexit’ where over half of the current workforce are migrants. But if required infrastructure and housing is not delivered, then it is likely that the UK’s historic GDP levels would suffer.

Increased use of technology is recommended. Not only could it increase output, shorten build times and reduce long term costs, it may assist in the attraction of a new generation of workers who are keen to work in a digitalised construction industry.

Change is certainly required, especially by utilising recent technology advancements, but it won’t happen overnight. The UK Government is usually at the heart of any change in the construction industry. However, end clients and the construction industry have an equally important part to play. Those at the forefront of change could reap the greater reward.

For more information, contact blogs@gateleyplc.com

[1] The Farmer Review of the UK Construction Labour Model written by Mark Farmer of Cast Consultancy – download report


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This blog is intended only as a synopsis of certain recent developments. If any matter referred to in this blog is sought to be relied upon, further advice should be obtained.