Spring 2022 UK Market Report
Minding the gap
Data from the ONS shows that whilst productivity improved across the whole economy, in the construction industry (including construction of buildings and civil engineering), productivity has remained relatively stagnant over the past 20 years.
Improving productivity is key to overcoming many of the challenges we face in the construction industry.
Challenges to the construction industry include:
Responding to the climate crisis
The UK Green Building Council (UKGBC) indicates that 25 percent of UK greenhouse gas emissions are from buildings and infrastructure. Considering surface transport (vehicle emissions) increases the proportion to 42 percent.
The UKGBC also outlines that approximately 80 percent of the UK’s 2050 building stock already exists, with the remaining 20 percent delivered in the intervening period.
Today’s new buildings will be less than halfway through their lifespan by 2050 and, therefore, must be equipped to deliver energy performance levels for net zero. There is also the vast amount of existing building stock that requires retrofitting to improve performance and a need for investment in infrastructure to improve connectivity and encourage sustainable behaviour.
Whilst end-users and investors are demanding higher performing buildings, the additional costs associated cannot always be passed on to them. The challenge for the construction industry is to find ways to improve building standards and reduce wastage.
Overcoming labour and skills shortages
Data from the ONS shows that vacancies in the construction industry remain at an elevated level in February–April 2022, with 49,000 open roles. This equates to an 88.5 percent increase from January–March 2020.
Data also shows that the UK-born construction workforce is ageing, with 10–20 percent reaching retirement age in the next five years. Brexit has had an impact, with fewer EU construction workers now in the UK.
Labour remains a key issue for the industry, with the skills crisis threatening to restrict the ability to deliver pipeline. It is vital that new, diverse talent is attracted to the built environment and that people are encouraged to stay within the industry.
Reacting to the viability gap
There is concern that the significant cost escalation and threat of recession will impact confidence, leading to the pausing of projects.
Fewer projects may result in a more competitive market and potentially some contractors buying work. This would be extremely problematic, given the price increases seen and the level of investment needed to improve the industry.
Ways to improve construction productivity:
Using digital modelling and analysing of emerging designs
The optimum design can be picked by digitally modelling and analysing emerging designs, making design time more efficient and focused. It can also help to reduce embodied carbon. Laing O’Rourke has developed a carbon calculator to analyse levels of embodied carbon and says that in using the calculator on 14 bid submissions, it was able to reduce embodied carbon emissions by up to 19 percent compared to the original designs.
Applying machine learning to find the best design
Machine learning can help to find the best design. Autodesk has given the example of WeWork, which wanted meeting spaces to match how people will be using the areas. Machine learning helped to understand and predict the frequency of use to enable design of the space to meet the end-user’s needs best. Another benefit of machine learning is that it can also help to highlight mistakes or omissions in a design.
Ensuring the best use of resource
The Circularity Gap Report 2022 highlights that global use of materials has nearly quadrupled in the last 50 years, outpacing population growth. Rising waste levels accompany consumption, and the report says that 90 percent of all materials extracted and used are wasted. Only 8.6 percent made it back into the global economy and global circularity reduced from 9.1 percent in 2018 to 8.6 percent in 2020.
The Circularity Gap Report proposes 21 circular solutions across societal needs: communication, healthcare, manufactured goods, mobility, nutrition and housing and infrastructure.
Solutions include:
- Increasing durability/promoting refurbishment and renovation
- Resource-efficient construction/using fewer materials and local materials
- Circular construction materials/using materials with recycled content and those which divert construction and demolition waste
- Natural solutions/integrating renewable energy sources and methods which reduce energy consumption, e.g. passive design
- Innovative vehicle consumption/using fuel-efficient driving and car sharing
- Effective ICT design/increasing digitalisation and cloud computing.
Clients are embedding circular economy and circular construction principles into their projects by designing for a long lifespan, futureproofing to enable future expansion and using low-carbon products and lean principles.
Embracing data and insights
Data and insights can help to improve performance and productivity.
Data analytics can flag up potential risks or issues to enable better decision making. nPlan analysed construction projects to see the impact of COVID-19 on programmes. Their analysis indicated that nearly nine in ten large construction projects, totalling over £100 million, are behind schedule following disruption from the pandemic. This type of analysis, which can be conducted in real-time, can help teams to better understand project performance and where to concentrate resources to improve performance.
Analysing operational data can help to understand the use of buildings to make improvements for future projects. There are examples of data from the residential sector, where accommodation monitoring helps to show demand at different times of the day, meaning the right services with the correct capacity can be included in future projects. The analysis can also enable tweaks to systems to improve energy efficiency, whilst meeting requirements.
The Construction Data Trust establishes a legal structure to enable organisations to share their data securely. This will enable analytics and artificial intelligence to be undertaken on the data. Access to more data will deliver better insights and help drive transformational change in the way projects are delivered.
Optimising design for MMC
Optimising design for MMC helps to realise quality and performance benefits. It can also help to reduce wastage and make better use of resources.
Rolls-Royce has recently launched a competition to find the primary location of a factory to build heavy reactor pressure vessels for small nuclear reactors. Making components in a factory and then assembling them onsite will reduce risks and construction costs.
The offsite approach is considered particularly beneficial considering the often remote locations of nuclear power plants. There is also a significant opportunity to export to other markets, such as Poland and Saudi Arabia.
Utilising robotics
Labour and skills shortages have been a long-term issue for the industry. As well as attracting and retaining more diverse talent, there is a place for robotics to help reduce onsite labour requirements and improve efficiency.
HS2 is pioneering printing concrete with computer-operated robots to build structures on site rather than transporting them as precast slabs by road before site assembly. The reinforced concrete structures, printed with a strengthening internal lattice structure, reduce the quantity of concrete and cuts waste.
Robotics can also enhance health and safety. The Oxford Robotics Institute is developing robotic technologies for operation in extreme and challenging environments, such as the nuclear power and offshore energy industries.
Conquering the challenging backdrop
To overcome issues, the industry needs to avoid the race to the bottom and continue with the increased collaboration already seen, to surmount the obstacles caused by the COVID-19 pandemic.
The COVID-19 pandemic has helped the construction industry to move forward, causing a step change in approach with:
- The implementation of digital tools and data analytics
- Overhaul of the just in time mindset
- Greater use of MMC
- Adoption of the Construction Playbook/outcome focussed procurement
- Increased flexible working
- Greater focus on the climate emergency.
Whilst there are obstacles, there is genuine optimism that the construction industry can improve productivity.
The Construction Productivity Taskforce has launched a seven-step framework to improve site productivity, comprising:
1.) Engage
2.) Define
3.) Identify data
4.) Identify technology
5.) Collate data
6.) Measure and analyse
7.) Improve and feedback.
The framework will be supported by a private sector playbook setting out policies and guidance for how projects are assessed, procured and delivered in the commercial sector to help drive productivity improvement.
