The UK economy is in an odd position. Globally, its current rate of growth is impressive; among the G7, the UK is the leader in annual GDP growth. Over the next two or three years we expect growth within the construction sector to be stronger than the general economy – certainly, the UK is ahead of the rest of Europe. So all is well?
The UK has a problem with productivity, and the construction sector has poorer productivity growth rates than any other.
Simply put, productivity is the amount of stuff (whether goods or services) that is produced by a person in an amount of time. UK productivity is lower than it was in 2008, and the construction industry hasn’t seen any significant growth in productivity in the last 20 years.
It’s tempting to think that productivity is just a function of how hard people work – work harder and you’ll produce more stuff!
It’s tempting to think that productivity is just a function of how hard people work, or as an economist might put it, ‘the degree or intensity of utilisation of labour’ – work harder and you’ll produce more stuff! But there are other significant factors, too. There’s the skill of the person doing the work, mostly a result of the level of education and training said person has been given – higher skills result in higher productivity.
Then there is also the tools a person has available to do their job, or ‘the amount of capital available per hour worked’. Having developed software tools means we can do more, more quickly, and more accurately. Having a developed infrastructure means we can move people, goods and services around more efficiently.
It’s clear that the UK government is looking for construction industry to make some big productivity improvements, but with targets for 2025 of construction costs being reduced by a third, and a 50% reduction in the time from inception to completion of buildings, this is not going to be achieved by just employing more people, or even by people working harder. The industry needs to change.
... the tools available to the construction industry are undergoing rapid change, and these will be instrumental in creating productivity gains.
How might this happen?
In the short term, we might expect productivity to naturally increase as the economy recovers. Staff who were retained during the recession will have increasing workloads. The RIBA Future Trends survey revealed that, in October 2014, the percentage of those saying that they had been under-employed (so producing less than they might) was the lowest figure since the survey began in January 2009 (12%). Furthermore, as the amount of design work available increases we might also expect practices to spend more time doing work and less time seeking it. These two things will have a positive effect on productivity, but they won’t, alone, get anywhere close to the government target.
For that to happen, we first need a highly skilled workforce. Universities and colleges have an important role to play here, equipping professions for the real world challenges they will face. CPD and ongoing training are also crucial; for example, the RIBA CPD programme , aligned to the core curriculum, equips architects with the skills and knowledge they need to be world-class architects. NBS training provides the skills for accurate and efficient specification writing.
Secondly, and perhaps more interestingly, the tools available to the construction industry are undergoing rapid change, and these will be instrumental in creating productivity gains. As the Construction 2025: strategy document puts it:
“The UK has a world-class science and research base that supports the development of innovative solutions in a number of priority areas for construction. These solutions need to be exploited across the industry in order to achieve the strategy’s ambition.”
To mention a few of the developments, we might see:
- Predictive and collaborative design through BIM
- New building products, such as LED lighting
- Smart buildings: the use of sensors and the ‘Internet of Things’
- Biotechnology and nanotechnology
- New building materials, e.g. plant-based polyurethane rigid foam or carbon microfibres
- 3D printing of building elements and systems, and perhaps even the buildings themselves.
The development and adoption of these tools will be the catalyst for productivity increases. We all have a part to play in this, and so too does NBS.
At NBS we will continue to be at the forefront of innovation within our area of expertise. Through NBS Create we have the world’s first BIM-ready specification system, in the NBS National BIM Library we have a world-leading library of generic and manufacturer BIM objects with an unparalleled level of information contained within them, and most recently the UK Government has awarded NBS a £1 million contract to deliver a NBS BIM Toolkit. This toolkit will enable a transformation of the procurement of buildings and infrastructure. Of course, BIM is just one of the tools we need to increase productivity, but it’s an important one.
We’ll see in 2025 whether we, as an industry, hit the government target. The widespread adoption of new technologies and the commensurate creation of a high skill workforce will be the means to productivity increases. Meanwhile, at least for those who like data, we can monitor how well we’re doing through the productivity figures
- Construction 2025: strategy , policy paper, UK Government
- Gross Domestic Product: Real GDP forecast , Office for National Statistics (ONS)
- Labour Productivity, Q2 2014 , Office for National Statistics (ONS)
- The UK productivity puzzle , by Alina Barnett, Sandra Batten, Adrian Chiu, Jeremy Franklin and María Sebastiá-Barriel of the Bank’s Monetary Analysis Directorate
- Trends of skills and productivity in the UK construction industry , by Mohamed S. Abdel-Wahab, Andrew R.J. Dainty and Stephen G. Ison (Loughborough University), Patrick Bowen (King’s Lynn), and Guy Hazlehurst (Mace Sustain)