The last few years have been difficult for many industries, but for the construction industry, it’s been particularly trying. Since the 2016 referendum, ongoing uncertainty within the sector has meant construction businesses have had to deal with the world’s hesitation to tie themselves into a British project of any kind.
Brexit isn’t the only challenge facing the construction industry. The effects of an aging workforce, the growing demand for more eco-friendly alternatives to traditional construction methods, and the introduction of many new technologies has meant that the sector must adapt rapidly.
Let’s look in more detail at these ongoing challenges for the industry this year. From profitability to sustainability, economic, social and political factors all play a part in the success of firms within this industry. Here is a selection of the major problems that the construction industry is fighting against in 2019:
Retirement and skill shortages
Last year saw the worst recorded level of skill shortages within the construction industry, and it’s only set to continue. From bricklayers, carpenters and plumbers, to electricians and plasterers; the scarcity of employees is reportedly across the board. An aging workforce means more retirement, which means the gap needs to be filled with new workers. But with less than one in 10 young people considering a job in construction, the sector needs to do more to entice the next generation of employee.
After all, the sector isn’t looking particularly appealing to foreign workers anymore, thanks to Brexit. In fact, a third of EU construction workers are said to be considering leaving the UK, further widening the skills shortage for the sector. On top of this, while skill shortage is a large enough issue, it is also having another detrimental effect on the industry — cost. Due to the lack of skilled tradespeople, wages are rising for jobs within the sector, which, along with a rise in material cost, is impacting on profitability for building companies.
Leaving the EU (and everything that comes with it)
The problem of uncertainty is rife when it comes to Brexit. While there is speculation regarding how the construction sector will fare after 29 March 2019 — the official leaving date — negotiations are ongoing, and we don’t yet know how taxes, imports and labour between the UK and EU will pan out.
But it’s not just labourers from the European Union that the sector stands to lose out on. According to government data, around 60% of imported building materials come from the EU. Combine this with a potential negative change in VAT and tax, and a loss of access to the European Investment Bank and European Investment Fund — major investors in construction SMEs — and we could see higher product prices and less capital for the construction sector.
Worrying for the world
There’s also pressure on the construction sector to adapt to greener methods too. According to the World Economic Forum, the construction industry can account for up to 40% of the world’s carbon emissions. With a global drive to crackdown on carbon emissions, any sector that doesn’t assist with this initiative could run the risk of incurring sanctions and fines — another potential hit that could affect the construction industry’s profitability.
The construction industry also needs to keep up with all the latest technological advances in order to stay relevant on a global scale. From robotics to BIM — building information modelling — there’s a wave of new technologies and gadgets available to help make construction more efficient and profitable. However, this is only possible if building firms of all sizes are willing to get on board with a new way of working.
Ways the sector can adapt
The problem of labour shortages
First, the industry must address the matter of its workforce. The Chartered Institute of Building claims that the construction sector will need to secure 157,000 new recruits by 2021 if it wants to keep up with demand. One method of enhancing the construction workforce is perhaps to encourage more apprenticeships in the industry — and positively, apprenticeship starts are at a record high in the UK construction industry at the moment.
With skilled workers from the EU no longer as readily available, the sector needs to work on homegrown talent. If the industry wants to prosper down the line, it will need to keep encouraging young workers to take on apprenticeship programmes as soon as possible, whether this is via positive workplace initiatives, bonuses or a closer relationship with schools.
It’s impossible to predict the full impact of Brexit right now. However, it’s clear that material costs and the ease of employing the labour of EU nationals are the sector’s greatest concerns. To keep material costs down, building companies must keep a detailed inventory of what they have and what they need. Replacing can be more costly than simply repairing and vice versa, while not ‘shopping around’ for the best local prices can mean bargains are missed. Although we may not see a significant increase in charges and tax for EU imports, it may be worth sourcing UK- and none EU-based alternatives now to ease the pressure in 2019.
Keeping it green
Going green isn’t a choice, it’s a necessity. The government is determined to lower carbon emissions by at least 80% of 1990 levels by 2050. So, the construction industry needs to be active in reducing its contribution to emissions if it wants to avoid potential financial penalties.
Highlighting the need to recycle in the sector will certainly help. Furthermore, many construction vehicles and equipment, such as work platforms, come with eco-friendlier hybrid motors or can be powered by batteries, while utilising solar energy panels, non-toxic paint, locally-grown timber, and low-energy lightbulbs during the construction process will all contribute to a greener industry.
Continuing to bring in new technology
The construction industry also needs to stay ahead of the technology game. Construction software that eases communication between different teams on a single building project is growing in use and popularity across the sector, as are BIM and augmented reality technologies which help project managers spot potentially costly issues before the physical construction. Similarly, robotic machines are helping ease the pressure of a lack of low-level workers while making potentially hazardous jobs easier to complete, and advances in materials — such as self-healing and permeable concrete solutions — are solving longstanding problems, like cracked building foundations.
There are many benefits to this. For example, it’s possible that construction companies can help protect themselves from using inefficient, labour-intensive and environmentally-unfriendly methods by learning about new technologies and bringing them into their workspaces.
The construction sector is certainly in the midst of a difficult time. However, a bright future is not unattainable. By adopting eco-friendly processes, being responsive to new technology, having a plan in place for Brexit, and encouraging apprentices to come on board, the sector can thrive in 2019 and beyond.