Developments in the last year signalled that UK construction is entering a new period of change, at an unprecedented high speed. Construction firms are under pressure to improve quality, meet new safety standards, satisfy growing client demands and especially to improve their own productivity while grappling with the impact of Brexit.
During 2019, we’ll see many new developments in the construction sector representing both challenges and opportunities for businesses. Critically, technology will be a key enabler for firms looking to keep ahead of this wave of change.
Here, PlanGrid’s Rob Elvidge and Amit Puri and independent industry expert Mark Coates share their seven predictions for UK construction in 2019–and explore how businesses can use them to their advantage. To see a brief overview of these trends, flip through our SlideShare below.
1. Construction’s challenges continue amidst Brexit uncertainty
It’s impossible to discuss 2019 without reference to the B-word–Brexit. With the political situation shifting almost daily, it’s extremely difficult to conjecture how Brexit will impact the UK construction in 2019, let alone the years, ahead. How any settlement shapes supply chains and the availability of talent will be pivotal for the health of the industry.
So far, uncertainty over the deal has led to significant risk-aversion throughout the sector, with many firms delaying key investments until the situation is clear. Some construction businesses have sought to protect their margins, with a negative impact on overall quality.
While keeping costs low is certainly appealing, the most successful firms in 2019 will focus on productivity. Using technology to improve efficiency on-site, reduce rework and enhance collaboration with other businesses will help firms to improve their performance and the quality of their output. Instead of a race to the bottom, a focus on productivity will enable businesses to weather the storm and look to a future beyond Brexit.
2. Power shifts to the owners
The swing of power to building owners will be a significant trend in 2019–and particularly visible in improvements to handovers. For many years, the quality of handovers on completion has been highly varied, often due to unclear collaboration between all parties. As a result, documentation is frequently delivered in a format determined by the contractor–which could mean paper, rather than digital, records. Meanwhile, plans have often been inaccurate due to rework and alterations.
In 2019, amidst greater scrutiny of construction practices, clients will demand a more active role in the construction process. Developing collaborative relationships with clients will be critical to firms’ success. The quality of the handover will be key, with owners dictating how they want their built-assets returned to them and demanding access to information in a format they can easily use.
This means there is a potential competitive advantage for construction businesses that use digital platforms to support information-sharing throughout every build. By using digital tools on-site to capture and share accurate information during the project, businesses can not only improve the quality of their handovers but create a more collaborative and closer relationship with their clients.
3. The decline of the Tier 1 contractor–and the birth of the integrator
The collapse of Carillion in 2018 highlighted significant flaws in UK construction models, particularly when it comes to large-scale public contracts. There are clear indications that in 2019 we’ll see a significant change in the role of the Tier 1 contractor–and the birth of a new delivery model.
Contractors will need to learn to move more quickly and decisively to deliver projects successfully. That means closely managing specialist subcontractors, spreading risk and sharing margins. In essence, we’ll see the birth of the integrator. This will provide more opportunities for Tier 2 contractors, who can find a niche in highly-skilled specialisation and innovative construction methods.
Equally, in the next 12 months, we’ll see demand for new ways for public sector clients and current Tier 1 contractors to accurately monitor the health of large scale projects, to avoid the challenges at the collapse of Carillion. Potential methods include:
- Development of project bank accounts
- New financial models
- Use of blockchain to share information
The real-time collection of data at the coal-face will be central in giving middle and senior management the data needed to make ongoing decisions. Both contractors and subcontractors that make use of digital platforms on-site will be well-positioned to better serve client needs in this area.
4. Concern over safety drives reforms in the wake of the Hackitt Review
At the end of 2018, the government announced that it will be adopting the recommendations of the Hackitt Review in full. The details of the new legislation will unfold early in the year, but there are already two key developments. Firstly, there is likely to be a requirement for a ‘golden thread’ of information on a site, to maintain detailed and accurate records throughout the build.
For many construction businesses, this will necessitate the adoption of digital tools to track safety documentation and deliver as-built records on handover. Collaborators will also need to ensure the interoperability of their platforms to share information throughout the process.
Secondly, and perhaps more strikingly, one named individual–rather than a company–will be personally liable for meeting the standards, meaning that any breaches could result in that person being pursued by criminal prosecution. This fear is likely to be an extremely powerful driving force behind behavioural change in the next 12 months and could spark the ‘root and branch’ reform that Dame Judith Hackitt indicated is necessary to avoid another Grenfell.
5. Firms are forced to focus on staff engagement amidst talent challenges
Talent shortages were felt across the construction industry in 2018 and were selected as the biggest challenge for the year ahead by 38% of industry professionals. Given the sector’s reliance on migrant labour, the Brexit transition deal could intensify this issue.
Staff retention and engagement will be a critical competitive advantage in 2019, to keep skills and experience in the business and boost productivity. The most successful firms will:
- Follow the John Lewis cooperative model, to make all staff feel like partners in the successes–and failures–of the firm
- Be transparent in all dealings with employees, asking for feedback and treating staff as a valued resource
- Create a robust learning environment and support mentoring to spread skills in the business
- Use technology on the jobsite to improve working lives and develop the digital skills of every employee
6. Sustainability remains high on the agenda and the green dividend sets businesses apart
Sustainability is high on the agenda of clients in the public and private sectors, particularly sparked by growing public interest after the popularity of the Blue Planet II series. The government has highlighted sustainable methods as a key area of growth for UK construction in 2019 and this chimes with Dame Judith Hackitt’s call for quality over cost.
There is clear demand from some clients for building materials and techniques that prioritise sustainability. Working off digital plans with construction productivity software removes the need to print costly paper drawings for a project. Teams on site get quicker access to plan revisions which reduces the risk of building errors on a project, cutting waste and further improving sustainability.
Construction firms have the opportunity to differentiate themselves through ‘green services’,’ such as using digital records to track the profile of materials used on projects. Equally, this may drive adoption of off-site manufacturing.
However, until sustainable construction methods are cost-effective for every firm, truly sustainable construction is likely to remain the realm of high-budget projects.
7. Technology is key for construction firms navigating months of change
As the construction industry navigates the changes ahead, technology will be a critical support. Digital tools can help to improve efficiency on the jobsite, eliminating costly rework and the time spent looking for information. Platforms will also enable firms to meet new requirements, whether it’s the safety standards set following the Hackitt Review or new owner demands.
The most successful businesses will look beyond the uncertainty of 2019, to make the technology investments that will secure their long term success. Digital tools can not only improve day to day operations but enable the collection of data to inform business strategy and planning. Using tools designed specifically for the construction industry will enable firms to realise the most value from their investments.
Embrace Digital Change for UK Construction in 2019 to Find Success
Throughout the next 12 months, we’ll see ambitious construction businesses either beginning their digital journey or continuing it. For UK construction in 2019, successful firms will use technology to realise the opportunities and meet the challenges of the shifting landscape ahead.
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.