The debate: What are the main challenges facing the construction sector?
19 October 2014
A panel of experts debate what challenges the construction industry will be facing in the near future.
MD, construction and design, Morgan Sindall
On the back of the recession, the market upturn will bring rising costs and a need for businesses to invest to be ready for an improved economy. This challenges firms to make sure they have appropriate resources and supply chain infrastructure in place.
In addition, the lack of clarity surrounding government policy on capital expenditure will increase during the run-up to, and following, the general election, making it difficult for companies to invest in preparation for work-winning activity.
Businesses also need to increase investment in attracting new talent. This not only means encouraging graduates and apprentices to join, but also promoting construction as a career for school-leavers who may consider our industry when choosing further or higher education.
As the economy improves, the companies that succeed will be those that have confidence to make bold decisions, to invest in relationships, technology and talent, and respond to challenging market conditions.
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Executive director, Osborne
As an industry our natural mindset is to find solutions to the challenges we face. From finding the resources to meet the upturn in demand in construction to addressing the digital revolution through Business Information Modelling, we are born solution finders and deliverers.
And therein lies the fundamental challenge for the construction industry. We focus on the solution rather than really understanding our customers’ needs in the first place.
Do we ever as construction professionals ask our customers whether a building is actually the real need? Do we ask whether there is a better, more efficient way of meeting that need? How often do we really take the time to understand the needs of our customers, or do we act on what we think they want?
It is a radical shift in mindset. But if, as an industry, we want to aspire to being part of the 3 per cent of businesses judged to deliver the ultimate customer experience, it is one we need to adopt.
Chief executive officer, Keepmoat
Over the past year, Keepmoat has grown solidly with a 5 per cent turnover increase, significant contracts and record new homes sales. However, success does not come without its challenges.
Although the UK’s economic recovery is well underway, it is inconsistent across the country. As a national business, we are mindful of these variations and have to adapt our strategies accordingly.
There is still an ongoing skills shortage across all construction trades. At Keepmoat, we are committed to training and supporting the next generation of construction talent in a bid to bridge this gap.
There are added pressures to be more resourceful in sourcing our materials as supply chain prices are increasing due to limited availability.
Lastly, there is lack of clarity in terms of government spending commitments within the sector. Although our project pipeline is attractive, it does affect visibility for future planning.
Chief executive, Construction Equipment Association
The UK construction equipment industry has twin challenges. Promises of more investment in rail, transport and housing must bear fruit – and not be kicked into the long grass when national finances continue to be squeezed. Certainty about the construction pipeline breeds confidence and stimulates our biggest home market, the plant-hire sector, into buying activity. We rank as the fifth-biggest producer of construction machines worldwide – but depend on market growth to prosper with more than 60 per cent of what we produce going overseas.
The mainland European market doesn’t help, and the sooner Europe regains its economic confidence the better – but it could be a long haul. Meanwhile, EU regulation brings us a lot of extra cost for limited benefit. Nevertheless, our latest sector report confirms that we are an £11billion industry – with vacancies and opportunities not just for engineers and technicians but, increasingly, for IT, sales and management skills.
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CEO & chairman, Bouygues UK
There’s no doubt one of the biggest challenges is the supply chain and skills shortage: from bricklayers to quantity surveyors, there’s a chronic lack of expertise. This has the potential to impact project delivery and may affect the continued growth of the industry as a contributor to the UK economy.
Businesses have responded, making salaries more competitive – but the construction industry needs to do more to attract talented people, encouraging them to develop their careers within the industry.
Of equal concern is the continued dissonance between the way housing, construction and infrastructure are dealt with, nationally and regionally. They are inextricably linked; unless we start addressing them as such, pressure on our major cities in terms of housing and office space will keep increasing and other cities will be left behind. We need to get out of this cycle of responding to immediate or emerging issues and develop a long-term, holistic approach.