The UK construction industry is currently experiencing rapid and unpredictable changes. Companies of all shapes and sizes face escalating costs in raw materials coupled with shipping delays and staff shortages. As the challenges mount and many in the industry find it increasingly difficult to stay ahead of the changes, here’s our thoughts on a few strategies to help keep your company on track.
Ageing workforce and skills shortage
Over the last few years, there has been an increasing shortage of skilled construction operatives. The existing workforce is getting older and there are fewer young people taking up trades or jobs in the construction industry as a career path. As skilled workers retire, there aren’t enough young tradespeople to take their place.
In 2016 Mark Farmer of the Cast consultancy reported on the construction industry’s labour model at the request of the government through the Construction Leadership Council. His report – Modernise or Die – concluded that the industry’s workforce size and demographic was a ticking time bomb which could leave the industry unable to deliver the critical core infrastructure needed for UK industry, businesses and residents. A reliance on migrant labour, lack of investment in training and a reluctance to use the new technology available had left the industry facing a 20% to 25% decline in the workforce.
Our thoughts
- It is vitally important for the industry that we all invest in skills and training for our current and future staff and make a concerted effort through the Construction Industry Training Board to appeal to a wider demographic in gender, age and social status.
- We should embrace innovation within the industry using modern methods of construction to reduce reliance on manual labour.
- Digitalisation allowing the next generation to use their natural skills within the industry.
Increasing cost of living
The cost of living crisis is something that none of us can escape. Unfortunately, it’s not just domestic bills that are affected but also the cost of raw materials for the construction industry. The spiralling prices are the result of a perfect storm of circumstances from Brexit and the pandemic to fuel costs, wage rises and increased demand.
Our thoughts
Our role as quantity surveyors is to manage your supply chain and reduce costs bringing you improved cost certainty, margins and productivity. So here’s a couple of tips to help you budget and save money where possible:
- Buy only what you need and save waste from over ordering
- Negotiate fluctuation risk with the client and share the risk/reward by using risk registers and counter all mechanisms.
- Benchmark costs over time as this could help you plan for increases in your next tender
- Plan for unexpected costs by identifying the tickle items and forecast cost increases in tenders as far as possible.
- Plan your procurement well ahead so you are not buying at the last moment when stock could be low in your area
- Compare prices from trusted suppliers for the most cost-effective price including delivery and service levels. The cheapest price is not cost effective if availability is poor and a delay is caused
Lack of construction space
As the UK population continues to rise, space in towns and cities decreases with the amount of new housing that is needed. Cities are already overpopulated and congested and with the UK population predicted to increase to 72 million people by 2041, it is time for all of us in the property and construction industry to rethink our next investments.
Our thoughts
- Familiarise yourself with the recent building regulation changes that allow easier conversion from retail to residential
- Be aware that the rise of home working means office space may become available for conversion to residential accommodation
- A higher proportion of the population is looking for housing that accommodates a more flexible way of working including home office space so factor this into residential developments
- Always consider the development of brownfield sites even if the extra costs and risks may appear prohibitive.
Sustainable building regulations
With a huge global focus on climate change and carbon footprint through the UN’s 2030 Agenda for Sustainable Development and the recent COP27 summit, it’s no surprise that the construction industry is also focusing on energy saving and sustainability. The UK construction industry is forward-thinking and innovative, with more sustainable practices being developed constantly. Buildings account for a significant amount of carbon emissions, so smarter building and material choice is essential in the fight to combat climate change.
Our thoughts
- Familiarise yourself with the new building regulations introduced in the summer. From June 15 2022 all new homes must produce 30% less carbon dioxide emissions. These regulations include retrofitting existing homes to reduce their carbon emissions, mandatory energy performance disclosure, and investment in renewable building materials.
- Preserve green spaces in your building projects wherever possible.
Do you need help or advice on your latest project? Contact CQS Solutions today to find out how we can help you.