Disruption to the Construction Industry
The construction industry is diverse and includes activities ranging from mining and forestry to the construction of infrastructure and buildings, the manufacture and supply of products, as well as maintenance, operation and disposal. It is a big sector with an output of more than £110 billion per year and contributes 7% of the UK’s GDP. Approximately 3 million people work in the construction industry which amounts to 10% of all UK employment.
The construction industry in the UK was hit hard by the COVID-19 pandemic when extensive safety measures were implemented, and fewer construction projects were started. Overall output declined by over 35 per cent. Despite this, the construction industry is bouncing back – perhaps better than ever before. Several issues must be tackled but more and more solutions are presented with lessons learned from the pandemic.
Challenges in the construction industry
COVID-19 and Brexit have been the most recent disruptions to the success of the construction industry. Brexit has led to a supply issue of material and an increasing problem of skill shortage. This, together with the very unexpected pandemic, has resulted in a worsening performance in all areas of the construction industry. However, there are more issues in the industry that have not originated from Brexit or COVID-19 that needs to be tackled.
Generally, the UK construction industry has a reputation for falling behind on projects, which is visible merely by looking at the half-finished government initiatives or the consistently delayed rail service upgrades. This is a result of the current gap in project management operations in the UK and too many small errors that are blocking progress.
Skills shortages have been a major issue in the construction industry for the past few years. The workforce is ageing and the highest proportion of workers in house building are aged between 45-54 years. Many workers in the construction sector will soon retire and attracting younger people have proven to be difficult. There has been a 14.6% fall in construction apprenticeships and fewer people are interested in starting a career in construction. The millennial generation has proven to favour digital roles which they believe is not encompassed in the construction sector. This decrease in younger talent has a serious effect on the sector as essential skills are lost when people retire.
Technological innovation is moving forward at a faster pace than ever. However, the construction sector is greatly falling behind the digital adaptation with productivity levels lower than all other sectors in the UK. Many businesses struggle with implementing new technology in their everyday work and the construction sector is the second least digitalised in the world. Many companies are reluctant to use technology in a larger scale as they might believe that it is not necessary due to the physical nature of the work. However, embracing digital technology delivers multiple secondary benefits in construction such as increased health and safety and more efficient use of materials.
Health and safety
Another big challenge in the sector is the concerns around health and safety. Construction is the sector leading with the highest number of health and safety-related accidents within the UK. Younger workers, aged between 16-24, have a substantially higher risk of workplace injury than older employees. According to HSE, within the UK there are 80,000 construction workers who suffer from work-related bad health each year and 64,000 who suffer from non-fatal injuries. The safety risks causing these statistics include electricity, noise, working from height, asbestos and airborne fibres and toxins. These health concerns also contribute to the issue of labour shortage as many people don’t want to work in an unsafe environment.
The future of the construction industry
While recent years have been tough for construction companies and employees, the industry’s position at the heart of any economy, delivering essential products such as homes, transport, offices and commercial buildings means that it will always hold an ability to bounce back from financially insecure times. The government has a target of building 300,000 houses a year and the post-Covid recovery aim is to “build, build, build”. Because of this, there will be several opportunities for housebuilders with more contracts being awarded for large housing projects.
Next One Technology
There is also a move towards digitalising the construction industry in larger scale. As one of the biggest issues in construction, this will go a long way in improving the sector. Digital technologies will address the challenges of poor profitability and productivity, skilled labour shortages, and sustainability concerns. This will result in a more productive and profitable construction industry. Next One Technology is a Swedish company working with digitalising the construction sector. They have extensive experience of business systems in the construction, contracting and maintenance industry. With their product NEXT, they offer tailor-made business systems with a focus on production. They have a combined industry experience of more than 200 years which provides customers with specific knowledge important to lead the way forward to digitalising their business.
Many other companies are similarly incorporating digital innovation into the construction industry to solve some of the foundational issues. Fonn was founded in 2016 and already have employees and customers all over the world. Fonn is a flexible system that can be adapted to companies with different needs and serves actors ranging from special contractors and builders to architects and engineers. Some functionalities with Fonn includes project reports, document management, project collaboration and task management. The performance of the construction industry in the UK is low compared to many other countries, and systems like Fonn simplifies many of the tasks and problems people in the industry may face.
An additional company working to solve some of the issues in the construction industry is MaintMaster. It is a Swedish company founded in 1995 and is a CMMS, Computerized Maintenance Management System, that is designed to support construction companies in their maintenance. It gives companies full control with its flexible interface and is scalable and tailored to any business. It is designed to organise, plan and streamline workflows and is easy to use.
Furthermore, Buildsafe is another innovative company trying to ease some of the issues seen in the construction industry. Buildsafe is the largest specialist broker for building warranties. They are a client led team of experts who aims to take the stress out of searching for building warranty products by offering an independent, clear view of the market.
As mentioned earlier, safety and health are other challenges in the construction industry. Blaklader is a Swedish company that develops, produces and distributes workwear, gloves and footwear for tradespeople with a focus on functionality, safety and quality. They aim to offer products that make work easier and provide maximum protection. Blaklader has been manufacturing and selling clothes since 1959 and is now one of Europe’s largest manufacturers of heavy-duty work garments.
As discussed, the construction industry in the UK has been taking some hits in recent years. Fortunately, several companies are working relentlessly in solving the challenges in the sector. This together with the resilience of the sector and with a willingness to investigate new technology could secure its long-term future making it possible for it to flourish again.
To find out more about the construction industry in the UK, or if you’re thinking about expanding your business to the UK, don’t hesitate to get in touch.