A challenging time for construction, when it should be thriving

In recent years there has been a changing priority for construction. The need to innovate and modernise (see: Construction labour market in the UK: Farmer review – GOV.UK) has changed the focus as the sector looks to make things better. The year 2022 has thrown though yet more challenges to the sector – after two years of pandemic there is now further uncertainty with cost inflation and further challenges on the skill base. The economic and business disruption is a big challenge for the sector – and a change in Prime Minister is another uncertainty on top of it all. The cost-of-living situation continues to take a hold and with the first interest rate rise in three years and more expected it’s certainly a sticky situation economically.

Now the challenges outlined above are not unique to construction and nor are they the first-time construction has had to deal with them. The sector has adapted in recent years and sought to innovate to provide more resilience – and has certainly shown that in recent times. Who would have thought flexible hours for on-site workers? That said there is still structural resiliency which is lacking and with all the above coupled with compliance and regulatory challenges the future is becoming more uncertain.

There are certain areas that just require more focus:

          Climate change and decarbonisation

          Skills shortage

          Supply chain

Climate change. Late last year  COP26 was delivered in Glasgow and with that came a lot of focus in the UK. With growing regulation, the carbon agenda has reached a critical point on the organisational agenda – hopefully it’s top or in the top three. Operational carbon is being reduced and corporates have nice Net Zero statements setting out the ambition and aim. Sadly, a lot lack the clarity and steps to reach that ambition – or at least that they’ve publicly said. There is becoming an increasing commentary on planning permissions being approved and rejected with a carbon angle. There is a need to seek to reduce embodied carbon so schemes that fail that become unviable. Existing assets being converted are assessed more and could result in the wrong decision being made for the longer term. In this modern world there is a huge need to look at the wider impact on the community and the organisation. The ultimate point is that ESG based investment decisions are here to stay.

Skills shortage.. A topic that has been on the construction sector’s mind for a while. An aging population of workers. A need to innovate and therefore bring in new skills. A diverse workforce. A sector used to having resources from the EU and now a sector that is struggling with simply the availability of resources. It is one big challenge (and accepted that it is simply not just construction as a sector). A skilled labour force can not simply be replenished in the same way you can buy more cement. The adoption of technology and looking at output and internal practices will help alleviate but this will take time to flow through. 

Supply chain. The issues faced with companies typically are impacting the supply chain they utilise too. There is a need also to respond to increasing client requirements. There needs to be a strong focus and promotion around safety and quality. Whether serving customers or your own supply chain there needs to be focus – this is not a tick-box exercise. 

The sector continues to face significant challenges and uncertainties. While progress has been made and credit should be given here it does sometimes feel like the sector falls behind how quickly other sectors have been to innovate. There is no right answer as to what the focus should be – all these areas are of equal importance and interlinked. Clearly tackling climate change is on us all and feels like it should be the top priority but without people and the supply chain onside progress will lack. All you can hope is that progress continues and the focus by organisations really drives change in the construction sector.  

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