Like any other industry, construction is constantly having to adapt to new challenges. The challenges facing the engineers aiming to tunnel near Stonehenge might be very different to those faced by the monument’s Neolithic builders, but when something needs doing, builders find a way.
It’s generally a good thing, of course, to respond to such hurdles – it’s what drives the industry forwards and makes it more resilient to future change. But sometimes, recognising the challenges is itself a challenge – and foreseeing them is even harder.
So what are 2021’s equivalents of getting 4-ton slabs of rock from South Wales to Salisbury Plain? Here are eight that are on our radar.
1. Skills shortage
By far the most pressing challenge is the serious skills gap in the construction industry. For several reasons, young people aren’t being attracted into an industry that can really represent a job for life. There will always be a need for homes, commercial buildings and infrastructural projects.
The industry has done plenty of research on the issue, and there seem to be several causes behind it, listed below.
- It’s not an attractive career for many. As new sectors emerge, be it the digital, creative and marketing or openings in the green industries, construction is chasing after a smaller proportion of the workforce. Digital is particularly attractive as almost all young people leave school with a selection of transferable digital skills that give them a foot in the door of any digital industry. Most school-leavers have few skills applicable to construction.
- It is still male-dominated. Women make up half the workforce in general, but only about 10% of those in construction. On the building sites themselves the number drops to around 1%. Whether it’s a hangover from the bad old days of laddish building site culture or some other reason, it’s something that needs to be addressed, as there’s huge untapped potential for recruitment and training.
- It can be seen as dangerous. Construction is a dangerous profession for those working on site, but safety measures have made it safer than ever, statistically speaking. Still, many people see the hard hats and steel toe caps and would rather be behind a desk.
- Brexit. Many construction workers from mainland Europe are put off by the paperwork, or even a feeling of not being welcome in the UK. Although there’s a global skills shortage, this effect particularly exacerbates the UK’s recruitment issues.
2. Ageing workforce
A lack of apprentices and trained recruits are biting on one end of the spaghetti, while an ageing workforce is nibbling away at the other. The net effect is an exacerbation of the skills shortage. Over 50s account for around a third of employees in the industry across the board. If they are retiring faster than new recruits are entering construction, which appears to be the case, this is a demographic time bomb that’s difficult to avoid.
Retraining can partly slow the leak, however. Those doing heavy work on site will inevitably slow down or become unable to do their jobs as time marches on, but retraining them to operate machinery or perform office or management tasks could help. They certainly have the experience; it just needs commitment from employers, something not always forthcoming in the contracting landscape.
We further explore these issues and more in the ‘Recreative Construction’ series by construction industry commentator, Brian Green.
3. Materials import
It might still be too early to pin the cause directly on Brexit (Covid has certainly played a part), but the shortage of construction materials in the UK is troubling the industry.
Some hitherto exporters to the UK have simply given up trying thanks to red tape, and are concentrating on supplying their continental neighbours. This issue is entirely down to policy and negotiated settlements, which can be changed if there’s the will. However, even without those issues, there is still a global shortage of some materials, notably timber and steel.
The construction industry will have to become much more sustainable and conscientious as climate change focuses the public’s mind.
Poor practices, long supply lines, unsustainable materials and high energy usage will all be subject to more stringent legislation, but there will also be enhanced public pressure and scrutiny surrounding the whole industry. When the buildings themselves have to be ever more energy efficient, this can make the problem worse, especially combined with the shortages mentioned above. However it’s an unavoidable reality, which the industry certainly has to cope with.
5. Cash flow
When times are hard, cash flow is always where constructors begin to feel the squeeze. It’s partly because of the long delay between contracts being signed and work being completed, during which time a lot can happen to the customer’s ability to pay.
Covid took about six weeks to go from a regional story in Wuhan to a global emergency, and the effects are still being felt. However, the skills shortage also extends to accountants and finance experts, and that certainly doesn’t help.
6. Land costs
An ever-present challenge to the construction industry, land costs are subject to fluctuations that are all but impossible to predict. We’re living through a period of relative volatility at the moment, and even if they settle, it still causes headaches for planners. It is, however, a problem that will never go away, so accurate forecasting is vital.
7. The value of the pound
The pound has fallen in value by about 13% over the past five years, which inevitably makes imports more expensive.
This is compounded by the supply-side problems, of course, although sellers don’t appear to be increasing prices to balance supply and demand … yet. It’s difficult to see what conditions could bring the pound back to the values we became used to in the 20th and early 21st centuries, so it looks like being another everlasting challenge that the accountants and the marketplace will have to deal with for the foreseeable future.
8. Technology and innovation
The construction industry is notoriously slow to adopt new technologies, whether that’s in the back office or in methods of construction. The latter is more understandable – tried and tested methods are hugely reassuring to builders and customers, and there also need to be skills to attend to new technologies.
But without innovation, the process becomes more inefficient and open to competition, often from abroad on large scale projects. As for the general IT in use in the planning, costing, design and administration of the industry, there’s no excuse for lagging – the digital revolution needs to be fully adopted.
Stay on the ball with Barbour ABI
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