Construction drives the economies of many countries. In the UK, for example, the construction industry contributed almost £100 billion to the country’s economy or about 6% of GDP in 2017. Also, the UK construction industry employs about 2.9 million workers, accounting for 10% of the national workforce and spread out among 300,000 construction businesses.
With construction impacting the UK so significantly, it’s suggested to examine what happened in the industry in 2018 and what may happen in 2019. Doing this can help you plan and prepare for meeting the inevitable challenges in Construction, that the new year will bring— especially if you’re a builder in the UK or Ireland or you deal with any companies there.
Below is a review of the state of construction in both the UK and Ireland. This brief article examines some of the highlights in the industry in 2018, reviews some of the year’s major construction projects, and looks at the key challenges facing the industry in 2019. We also examine how technology, like Initiafy’s platform, can help overcome these challenges.
Overview of Construction Industries
Construction Projects: United Kingdom
After a lackluster start to the year, Construction staged a better than expected recovery in June, propelling the industry forward in the following months. The recovery suggests that much of the slowdown earlier in the year was more a result of the “Beast of the East” compared to weakness.
This weather phenomena, combined with the storm Emma, resulted in the UK’s worst weather conditions in years, slowing construction dramatically going on into June. The weather was so bad at one point, the Met Office issued a red alert—it’s most severe warning, meaning that these conditions are likely to have a dangerous impact. Building continued despite the bad weather, with infrastructure projects and home building leading the way.
Industry analysts suggest that home building and big-ticket governmental and commercial construction projects, like the expansion of Heathrow Airport and the High Speed 2 Rail Network, will remain to power the industry into 2019. Some key UK construction projects during 2018 included:
- Angel Meadow (Manchester)
- AKYON London One (London)
- Capital Square (Edinburgh)
- Paddington Cube (London)
- Stevenage Town Center (Hertfordshire)
The size of these construction projects and others like this indicates that the UK will remain a construction leader in Europe even after it leaves the Economic Union. These construction projects will also help offset weak performance in other sections of the industry, like new office construction, which some expect to fall significantly in 2019.
Construction Projects: Ireland
This country also saw significant developments during 2018. According to a PwC Construction Market Monitor survey, 71% percent of the respondents said that construction in private housing increased, 53% of respondents said construction in public housing increased, while 44% of respondents said that construction in infrastructure increased. Government investment in roads, hospitals, and communication networks, known as Project Ireland 2040, is good news for the industry, driving it forward into this country in 2019 and beyond.
Challenges Faced by the UK/Irish Construction Industry
Construction companies in the UK and Ireland face the same challenges going forward that construction companies in other countries face. They will need to overcome these challenges to survive and thrive going forward.
Below are some of the most critical challenges that the industry faces:
- Impact of Brexit — The EU withdrawal is causing considerable uncertainty in the industry. Research done recently by Gleeds, a property and construction consultancy, showed that concern over the exit has “intensified considerably” as industry firms grow increasingly cautious over the negative consequences of leaving the EU, with four out of five companies expecting—and preparing for—a negative impact.
- Skills shortage — The hard-hat industries are in the grips of a major skills shortage event. Construction is no exception. The shortage limits possible construction activities, simultaneously increasing labour costs. Some experts say the shortage is at a record level and will get worse in the future. The Charted industry of Building (CIOB) reports that the industry will require 157, 000 new recruits by 2021 to meet these needs.
- Materials Inflation — Materials inflation is taking a huge bite out of the UK/Irish construction industries. The price of materials is rising thanks to a fall in the value of sterling. Anything imported from the Eurozone and farther away costs more. Material costs could increase even more depending on the Brexit deal struck with the EU.
- Labour problems — Several factors are making the UK an unattractive place to work. The fall of sterling, mentioned above, reduces the value of potential earnings for workers. With construction projects increasing throughout different locations in Europe, the UK and Ireland are no longer the “go to” places for construction workers. In a warning given by the Federation of Master Builders (FMB), a CEO worries that migrant workers returning home for Christmas might not come back after the vacations.
- Number/Rate of Injuries — The industry has seen an improvement during recent years in cutting the number and rate of injuries to construction workers. Nevertheless, construction remains a high-risk industry. As such, it accounts for a high percentage of fatal and more serious injuries. Construction is also a high-risk industry for health injuries, including back problems and upper limbs.
Cutting the Number/Rate of Injuries in Construction
The biggest challenge for many construction companies in the UK and Ireland may just be worksite accidents and injuries. Contractors and temporary workers are the weak links in many UK and Irish company’s safety programs. Many are self-employed, work for small companies, frequently change jobs, or work away from home. These workers are more prone to accidents and injuries than full-time employees.
Increasingly, construction companies continue to turn to technology, like drones, the IoT, and SaaS contractor management software, to protect workers and reduce injuries. For example, the new Access Control app that Initiafy recently added to this solution, helps companies reduce the number of injuries and accidents on their sites, cutting compensation costs and boosting profitability.
Access Control tightens control over who can access a company’s worksite. It makes check-in check-out faster and easier—but only if workers meet all the mandatory requirements. If they fail to do so, for example not completing a required training course, then the app prevents them from logging into the platform and gaining access to the worksite until the worker meets all requirements.
Some analysts expect growth in the Construction industry to be broadly flat in the UK and Ireland during 2019, dampening profitability for the year across the board. Key challenges, like the number and rate of onsite injuries, will also reduce profitability. For example, if construction companies fail to reduce risk, meet compliance requirements, and cut the rate of accidents and injuries occurring in 2019, this will cost them big time.
Savvy construction companies in these countries, however, are using technology, like Initiafy’s software platform, to meet this challenge. With apps like Access Control, the platform helps reduce risks, cut compensation costs, and boost corporate profitability. This, in turn, will increase a company’s chances of surviving into 2019 and beyond.