Winter 21/22 UK Market Report
Key trends
Whilst there have been many challenges brought about by the COVID-19 pandemic, it has also helped to introduce and speed up the adoption of new procedures and ways of working which will benefit the construction industry for years to come.
Respondents to our Winter 2021/22 survey said that their companies are planning to make various investments in the year ahead, with most identifying net zero carbon and sustainability as the key investment for 2022. Several responses noted that investment had already been made in previous years in these areas.
Increased use of MMC
Of contractor respondents to our Winter 2020/21 survey, 92 percent thought that offsite manufacture would be the fastest growing technology in 2021. There has been increased use of MMC which helped site productivity during the height of the pandemic when site numbers were reduced to comply with social distancing. The government’s presumption in favour of MMC is continuing and The Crown Commercial Service (CCS) has recently held bidder’s days for the Offsite Construction Solutions (OCS) agreement which will provide public sector organisations with direct access to manufacturers for a complete range of offsite construction solutions. The agreement is expected to be worth up to £10 billion and last for seven years. Framework award is due in January 2023.
Moving away from just in time/engaging earlier with the supply chain
To overcome the issues with deliveries, materials availability and longer lead-in times, there has been earlier engagement with the supply chain to minimise disruption. Whilst the industry has traditionally adopted a just in time approach, contractors have said that they are using the following methods to minimise the impact to projects:
- Early/advanced orders
- Ordering ahead of time and storage off-site
- Reserving subcontractors/materials before contract
- Stockpiling/over ordering materials
- Investments in suppliers
- Reprogramming/resequencing works
- Increased communication and collaboration with the supply chain.
Clients and consultants are also engaging earlier with the full supply chain to better understand the challenges and to mitigate risks as much as possible.
Adoption of the Construction Playbook/outcome-based procurement
The Construction Playbook was launched in December 2020 and it includes 14 policies which specify how public projects should be assessed, procured and delivered. The principles of the Playbook are providing greater certainty to the supply chain with long-term plans for key programmes, incentivising innovation, placing value on outcomes and embedding digital ways of working.
All central government departments and their arm's length bodies are expected to follow the Playbook on a ‘comply or explain’ basis, and evidence of its adoption has been seen in tenders, framework requirements and project and programme delivery.
At a time when public finances are strained, the adoption of outcome-focused procurement is important to ensure that the investment delivers the required benefits and that funding is not wasted. It is also hoped that the Playbook will help the industry to become more sustainable: for instance, the sharing of and commitment to pipelines is important to allow supply chains to invest in necessary skills, technology and the like.
Focus on the climate emergency/transition to net zero carbon
Following the 26th UN Climate Change Conference of the Parties (COP26) and recognition that the world is running out of time to act to limit temperature increases, there has been a shift from words to action. Clients and developers are increasingly considering the performance of buildings and how to futureproof their assets. As well as public pressure and ESG considerations, there is also concern that obsolescence issues will emerge if companies are slow to act, affecting the value and marketability of assets.
Of respondents to our Winter 2021/22 survey, 49 percent said that there is appetite from end-users to pay a premium for net zero carbon and sustainable technologies. Increased costs for materials and labour are already adding pressure to viability assessments, however there is the consideration of the harm of not acting and not having a future-proofed asset. There is increased consideration being given to whole life cost and how to incorporate flexibility into buildings. With the increased adoption of green technologies and sustainable buildings, it is anticipated that the green premium will reduce, further improving the level of uptake.
From the responses to our survey, 94 percent said that there is insufficient infrastructure in place to sustain the government’s net zero carbon targets. This highlights the importance of infrastructure development in the transition to net zero carbon and that investment is required in energy sources and distribution in order to allow electrification to move away from fossil fuels. The long-term aim of sustainability being integrated as a way of life should also be considered, for example, investment in public transport and electric vehicle charging points.
Implementation of digital and data tools
There has been an increase in the use of digital and data tools in the construction industry to improve efficiency, health and safety and reduce waste.
Some examples of digital and data tools and their potential uses are:
Data analytics
- The collection of data (such as cost, programme and other project data) can support planning and decision making on projects ensuring attainable outcomes and robust budgets
- Progress and budgets can be carefully monitored to track delivery of projects and highlight potential risks which need focussing on
- Collecting data from projects can enable data-driven decision making and better outcomes for future projects.
Artificial Intelligence (AI) and machine learning
- AI and machine learning can help assign priority to issues, highlighting key risks for focus and mitigation
- Use of robots, sensors, etc. can make project delivery more efficient by capturing information for analysis to highlight risks and labour opportunities, etc.
- Machine learning in the form of generative design can identify and mitigate clashes between different models or to explore solutions to find the optimum design.
Digital twins
- A digital twin is a realistic virtual representation of something physical. The object of study is fitted with sensors that produce data about the physical object’s performance, which is relayed to a processing system and applied to the digital copy. Using the data, the virtual model can then run simulations, study performance and generate possible improvements to the physical object.
- The Centre for Digital Built Britain, a partnership between the University of Cambridge and the BEIS, is running the National Digital Twin programme to enable a National Digital Twin — an ecosystem of connected digital twins fostering better outcomes from the built environment and delivering an Information Management Framework to ensure secure resilient data sharing.
- Numerous benefits have been identified from the formation of a National Digital Twin, such as better outcomes for the public, higher performing and more resilient infrastructure, better risk management and less disruption and waste. It will also allow for greater resource efficiency, enabling the circular economy in the built environment.
- Overall, it is indicated that a National Digital Twin will generate approximately £7 billion of value per year from cost savings and efficiency gains.
3D printing
- 3D printing can reduce waste and improve efficiency
- Robotics can help to reduce on-site labour requirements
- HS2’s London tunnels contractor, SCS JV, is pioneering printing concrete with computer-operated robots to build structures on site rather than transporting them as pre-cast slabs by road before being assembled and lowered into place by cranes. The reinforced concrete structures are to be printed with a strengthening unique internal lattice structure, which not only significantly reduces the quantity of concrete required but also cuts waste. Working with ChangeMaker3D and Versarien, SCS JV has combined the concrete printing process with the strongest material ever tested, graphene, to help improve site safety, flexibility, and allow a shorter programme and a reduced carbon footprint. Overall, the process is estimated to reduce the amount of concrete used and contribute to lowering carbon by up to 50 percent. Robotics and fewer deliveries could achieve even greater carbon reduction.
We have recently launched our Gleeds Data Academy in partnership with Projecting Success, which will give our employees the chance to upskill in data methodologies and project data analytics. Ranging from shorter courses to a full apprenticeship, the courses will empower our team to develop their digital capabilities, drive greater efficiencies and ultimately increase the predictability of project outcomes for our clients.
Flexible working
There have been changes to the way people work with increased flexibility in both working hours and where people are based. These changes were not limited to consultants; an 18-month study by Build UK and Timewise concluded that flexible working could be successfully implemented on construction sites. Carried out on test sites by main contractors, the trial tested flexible working practices for site workers, including subcontractors, for 18 months. All firms involved reported no negative impact on budgets or timeframes and some data from the study suggested that adjustments to working patterns could drive savings on labour costs due to enhanced productivity. There were also significant well-being benefits reported amongst participants.
These new procedures and ways of working may help to attract new entrants to the industry by offering different roles such as digital responsibilities and jobs in factories related to MMC. Offering more flexibility is seen as key by many companies to attract new workers into construction and ensure talent stays within the industry.
Collaboration
The challenges from the COVID-19 pandemic have seen increased collaboration across the industry to overcome the issues faced. Longer-term partnerships will help to form the basis for improvement and innovation and it’s hoped that this shift will continue to formulate a more sustainable and productive construction industry to help meet the UK’s greater aspirations to transition to net zero carbon and for a strong and resilient economy.
