Construction Week  - May 3rd and 4th

Construction Week - May 3rd and 4th

The construction industry is facing a wide range of challenges, from a skills shortage through to the Net Zero commitments – on some measures, the sector contributes to 40% of the UK’s emissions. The annual get-together in the Excel centre was an opportunity for industry leaders to share perspectives on the key issues.

Modern Methods of Construction (MMC) or Offsite Construction

MMC is seen by its protagonists as the inevitable way forward, improving productivity, lowering costs and controlling carbon all at the same time. Yet it seems to be a long time coming. The conference was told by Sam Stacey of UK Research & Innovation that the Government is committed to bringing about a revolution in speeding up construction by adopting MMC in housing and infrastructure.

The Construction Playbook outlines the approach that will be adopted in the public sector to co-ordinate the supply chain to make it more akin to the automotive or aircraft industry.

There are 85 case studies of applications of digital techniques, augmented  reality from design stage tools, whole life value and carbon, automated data production, and interoperability between data.  These include the Forge – a kit of parts approach used for an office block; and an intelligent approach to piling, using the hollow to exchange heat from the ground.

Techniques have been applied to school design in the public sector and transport infrastructure – building a footbridge.

Despite all this, there remains scepticism in the industry about the scale of the impact MMC will make.

Disruptive Innovation

Sam also identified several areas of disruptive change.

  1. New companies, that are not necessarily in construction at the moment but who have manufacturing capabilities, could move into the MMC market. The shift to offsite fabrication will create more opportunities for these businesses to contribute to the built environment.
  2. Specialist online marketplaces. With MMC, sellers and buyers will need to communicate differently. New marketplaces, similar to Amazon or eBay, targeted at construction could emerge. First-mover advantage in this area will be important.
  3. Information systems to improve productivity – more than 50% of processes add no value, with people waiting for materials to arrive and so on. Treating construction sites as a factory environment makes it possible to improve productivity by monitoring the arrival of materials in a “just in time” approach.
  4. Applying techniques to reduce both embedded carbon and operational carbon emissions will be critical and create huge new business opportunities for innovative companies.

Culture change

Several people in panel discussions and beyond identified a need for culture change in the industry. The Grenfell tragedy is already shaking up the safety culture. However, productivity and skills levels are low; diversity is poor. The industry needs to be more efficient and healthier for people – the stories the industry tells each other are key, as is the way it sees itself. To “build back better,” the industry needs to get it right. It must focus on responsibility, accountability and transparency.

Fewer than 2% of site workers are female. There are female-only contractors, but the industry does not describe the roles to attract more women. More advanced technology could even up the opportunities. With more work being done retrofitting homes, there are more roles for a diverse workforce working in people’s homes.

Organisations need to think about supporting staff of all ages and different backgrounds. Mental health is a big issue. Encouraging more young people to join could help diminish the “man-up” culture.

The industry needs to think more in terms of being more inclusive than more diverse. This involves having clear company values, enabling flexible working and being creative and bold. Managers need to have the skills to have conversations with their staff at all levels and improve inclusivity on the worksite

Digital transformation

The Building Safety bill will require significant data management of assets, creating a need for people in the industry who are digitally able and can create data, understand data and share data. Particular skills required include:

  • Data collection and instrumentation. Basic improvement even at site level, ability to take photos about what’s going on site and share that data.
  • Information management – ability to save information in the right place and to share it effectively.
  • Data interpretation and analysis
  • Data visualisation – dashboards, 3D modelling and visualisation packages to get an overlay of the site
  • Software development – software is seen as something that is bought in but organisations need to be able to tweak the software to suit their needs.

Economic trends

Construction is fairly resilient. It had a fall off during lockdown but recovered and is now 1.1% larger than pre-pandemic. GDP is likely to decline in the second quarter. The housing sector was helped by the stamp duty holiday and the help to buy scheme, so has had fairly healthy growth.

There is currently a goods-led inflation, especially increasing raw material prices – timber prices are up 35%, steel 50%.

There will still be big increases in energy prices so CPI will continue to rise. The Bank rate is likely to go up again.

The Ukraine crisis creates further uncertainty – intensified sanctions could lead to a recession.

There are fewer people employed in the industry –  400,000 fewer than before the pandemic. Older workers have taken retirement and long -term sickness,  and many won’t come back in the labour force so there will be a smaller labour force than before and 50,000 job vacancies in construction.

Overall, the future is hugely uncertain but better than 6 months ago; the short to medium outlook is relatively positive though with slower growth.


Climate change is a challenge but also a draw for young people, who are interested in making a difference. Wanting a career in a Green Job is one of the top 3 criteria for young people. The industry can attract the next generation of the workforce to be part of the Net Zero challenge. The industry can go onto the front foot about climate change and advertise how young people can make a difference by installing new technology. It opens up new roles in:

  • Design
  • IT
  • Customer care
  • Net Zero engineers, including retrofit
  • Significant role for standards, as an enabler for the sector.
  • Specific shortages e.g. asbestos inspectors as retrofits may need asbestos removal

There is a need to define core competencies for roles so that people can understand what training delivers and how they can move into roles that have similar competencies. There also need to be professional pathways to describe the digital roles, in much the same way as the adverts for the Navy are developed to attract to a profession.

There is a need to train people to work on existing buildings and do retrofit, rather than just new build as at present. The skills needed for retrofit are about integration with a whole house mindset to get all the technology working together and the supply chain well integrated. Key skills gaps are:

  • Property assessment
  • Advice and consumer care so customers are well informed about the options
  • Low carbon heating installation
  • Use of digital tools
  • Soft skills to bring customers along with the journey to have their house retrofitted

Green and renewable energy 

The energy transition will see the country moving to more distributed energy generation with solar, and other opportunities for renewables. Renewables and battery storage and flexible generation are becoming more important. Electrification of heat and transport will drive an increased need for generation.

There is a big opportunity for the construction sector in both new build and retrofits as demand increases for solar panels on roofs, warehouses and homes. Corporates are looking at own generation on site.

Offshore wind and nuclear have big targets, with a reduction in planning consent times from 4 to one year for offshore wind. There’s also an ambition to scale up geothermal and marine.

The boiler upgrade scheme has gone live: there is a £5k grant for installing heat pumps but the installs typically cost £15,000. The budget is only enough to support 30,0000 heat pumps installs a year despite the government target of 600,000 heat pumps per year by 2026.

Mental Health

Mental health is an issue in construction, with suicide rates high relative to other sectors. The sector attracts a lot of ex-military who bring high level of skill but may have issues with PTSD. There is a need to identify any underlying potential issues and create policies to improve mental health, promote psychological safety, and ensure sufficient workplace adjustments to maximise the potential of individuals with mental health conditions.

In particular, there is a need to understand the signs of exhaustion and deteriorating staff welfare and encourage staff to help themselves and the team.

The future

The future of the construction industry is being shaped by a wide range of forces. We can identify how many of them could play out, but the speed of change remains very uncertain. Traditionally, the industry has been slow to change, but the Net Zero challenge could trigger a huge wave of new developments.

Written by Huw Williams, SAMI Principal 

The views expressed are those of the author(s) and not necessarily of SAMI Consulting.

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