Twelve months in construction hasn’t always meant a great deal of change. While industries like retail and transport have been completely transformed by digital disruption, UK construction has remained pretty constant, in terms of building techniques, working practices and even the use of paper plans on site.
But in 2017, construction hit a turning point. The devastating events at Grenfell Tower, together with a backdrop of political and economic uncertainty, signalled a new era of change–and proved just how much difference a year can make. And in 2018, we’ve seen that construction really is changing–faster than ever before.
Here, PlanGrid’s Rob Elvidge and Amit Puri and independent industry expert Mark Coates share their reflections on 2018 UK construction industry and the four biggest developments that are reshaping the sector.
1. The collapse of Carillion signalled a seismic shift
2018 began with a bang as that long-standing behemoth of the construction world, Carillion, went into administration. At the time it seemed unthinkable that one of the stalwarts of the UK construction scene could fail so spectacularly. But in fact, the collapse of Carillion was a long time coming.
It’s true that the business had been damaged by years of poor decisions. However, Carillion’s failure also crystallised wider flaws in the industry. Critically, procurement for many jobs had become a race to the bottom. A few Tier 1 contractors were taking on too many projects and too much risk, with very small margins. Simply put, for large public sector projects construction’s procurement and delivery model is not sustainable.
In 2018, the liquidation of Carillion had extremely negative repercussions, with many smaller firms put into financial difficulties or administration, thousands of workers losing their jobs and public sector construction projects like long-promised hospitals at risk of collapse. Uncertainty lasted throughout the year and understandably, many subcontractors still feel cautious about collaborating with large contractors.
But more positively, construction practices are in the spotlight and so there is much more scrutiny within businesses to ensure they don’t make the headlines for the wrong reasons. In 2019 and beyond, we’ll see wholesale changes and improvements to Tier 1 contracting as the industry reacts to the implications of the collapse–and you can read more in our 2019 predictions blog, which will be posted next week on our blog.
2. The Hackitt Review prompted reflection on safety shortcomings
The impact of the Grenfell Tower tragedy continued to unfold in 2018, as the review led by Dame Judith Hackitt explored the issue of building regulations and safety in the industry in the UK, which led to the release of the Building a Safer Future report in May.
This prompted reflection for many stakeholders in construction, from contractors and subcontractors to clients, government and even residents, on past shortcomings in safety practices with projects.
Record-keeping, unclear responsibilities and outdated working practices have all been significant challenges (you can read more on our learnings from the review here). Ultimately, Dame Judith Hackitt has called for ‘root and branch reform’ to improve safety throughout the industry.
If 2018 has been a time for reflection, then 2019 will be a time for action. On 18th December 2018, the government announced that it will accept all of the Hackitt Review’s recommendations, and the implications will become clear in the upcoming months.
The aftermath of Grenfell also contributed to our third development of the year–the growing impetus for change in construction.
3. Construction began to acknowledge the new rate of change
Many construction firms have operated for years under the mantra of ‘we’ve always done things this way.’ New managers have come up through the ranks and adopted the practices of their predecessors. Working practices have remained largely constant; even in 2018, 22% of firms rely entirely on paper-based drawings on-site, with one in ten making little or no use of technology.
But now, the market is evolving at speed. The two drastic events mentioned above, the collapse of Carillion and the Grenfell fire, are creating unprecedented scrutiny of the sector–and clients are becoming more demanding than ever. Altogether, 2018 marked the beginning of a new period of change in construction, and it’s moving faster than ever.
Virtually every aspect of construction is being affected. That means new approaches to collaboration with other firms; new procurement and delivery models; innovative ways of working and the implementation of truly modern tools on-site. In 2018, many firms realised that they must evolve to keep up–or risk being left behind.
But achieving a step-change in construction means adopting modern tools. Investing in technology is absolutely the right way to improve productivity, enhance quality and redefine safety–and keep ahead of the rate of change.
4. The demand for digital tools that both transform and fit into the firm
In 2018, many firms have been waking up to the potential of technology. But how firms have approached this area is critical. When margins are tight, the success of firms can depend on choosing the right systems for the business–and creating a robust digital strategy–so that investments pay dividends.
Managing change in the business can be the most challenging aspect of implementing new technology, and many firms have run into hurdles in 2018. New systems shouldn’t force firms to abandon their current working practices, or the change won’t be sustainable. There is a growing demand for platforms that are easy to implement and easy to use, to ensure the technology is accessible for everyone in the business.
In 2018, some construction businesses also began to realise the value of data insights, both for the firm and for the client. With data on building operations, businesses can make informed efficiency improvements–while clients can trust that they have an accurate and detailed as-built plan.
The next step for firms will be to ensure that their technology systems work well together and connect information from across the business. This will enable the combined data to paint a bigger and brighter picture, setting firms apart from their competition in 2019 and beyond.
Learning from 2018 UK Construction to Move Forward Into 2019 and Beyond
The last 12 months have signalled a significant increase in the rate of change in UK construction. While this can be daunting, there are also significant opportunities ahead for firms who are ready to evolve. With the right investments, agile firms can–and will–flourish.
Stay tuned for our 2019 UK construction predictions for more insights on what’s ahead, including the key challenges and opportunities for firms willing to ride the wave of change.
Robert Elvidge is Managing Director, EMEA with PlanGrid. He joined in 2016 to set up the EMEA field operations. Robert has a background in cloud/SaaS solutions, business intelligence tools along with mobile application usage. With 25 years experience in the software space Robert’s key focus is to drive innovation, and improve productivity and business benefits for construction firms across the region. He also previously spent 5 years working in Australia/APAC.
Amit Puri is the Lead Consultant for the EMEA region at PlanGrid. Before joining in 2018, Amit spent 9 years in the Property & Construction industry, primarily 5 years in a Quality/Compliance and digitising construction processes, implementation and improvement capacity at a Main Contractor. During his time in construction, Amit has worked on multiple projects across the U.K. of varying size, type, value and complexity. Amit holds a masters degree in Property Development from Birmingham City University.
Mark Coates is founding Director of MMT International, and has been specialising in interim support. Having helped a number of companies enter new markets with minimal risk and cost resulting in a stable platform to build from and thus secure a new place in the market with reducing disruption to a business.
With over 28 years in the construction industry originally starting as Quantity Surveyor with experience in Infrastructure, Commerical fit out and Residential work ranging from road and rail projects to large stadium build’s. Mark has developed a number of sites and properties across the Northwest of England and now works with asset owners and their financial team making sure their supply chain get the most out of a development increasing contractor performance and thus giving greater profitability all round.