More productive today, more people tomorrow
Construction’s expansion in 2022 was notable not just for the way it bucked the slowdown in the wider economy. It was achieved even as the number of people working in construction, and the number of hours they worked, decreased.
Construction sector employment has fallen by 10.5 percent since the start of 2019. The total number of hours worked by the industry has shrunk by 6.7 percent over the same period. For output to have increased as human inputs decreased, means that people were working more productively – doing more with less.
Source: Office for National Statistics
Official data – which measures productivity as output per hour worked – shows it has improved more dramatically in construction than in many sectors of the economy.
Source: Office for National Statistics
The improvement comes after a long period of stagnation and decline in construction productivity. Over the two decades prior to COVID-19, output per hour in the industry fell by 4.5 percent. In the two years following the pandemic, it rose by 11.0 percent.
To extend these productivity gains, we need to identify, understand and leverage the factors behind them. There are three key drivers:
Increased capability, and more joined up use of it
Infrastructure, the fastest-growing construction subsector in Q4 2022, has been a beneficiary of the UK’s reaffirmed commitment to several major programmes, including Hinkley Point C and Great British Nuclear. The Government says up to £31 billion of public works contracts for economic and social infrastructure will come to market over the next year, but infrastructure’s productivity gains do not stem from economies of scale alone.
The Government’s Construction Playbook, published in September 2022, is making the way infrastructure programmes are assessed, procured and managed more joined up. And the Infrastructure and Projects Authority’s Project Routemap provides practical advice, gleaned from best practices across the industry, to help set projects up for success.
At the programme level, contractors are finding new ways to work together more effectively. Hinkley Point C, a major new nuclear power station in Somerset, has pioneered a shared services model in which components supplied from around the world are delivered to the site by a centralised, specialist logistics provider.
Relative to some other construction subsectors, infrastructure has the foresight advantages that come with long-term public funding commitments. Investment in the development of new capabilities and more efficient collaboration across the supply chain have delivered lasting productivity gains that the wider industry should learn from.
Construction reinvented
Technology too is transforming the way projects are designed, procured and managed. This is apparent in the multi-dimensional digital environment through which programme teams now measure and control progress, both on-site and across the logistics chain.
Digital tools and AI software enable complex but repetitive tasks to be completed more quickly and efficiently, providing ultra-detailed, live and interrogable data that allows designers, engineers, and suppliers to collaborate in real time. Successfully embedding digital practices doesn’t just improve programme performance; it also ensures the asset or scheme will make a positive difference, both during the project and after completion, delivering real economic, environmental and social value.
While this ‘digital-first’ approach boosts productivity right from the outset of the design phase, autonomous technology is increasingly being used in project execution, too.
From drones that provide 3D mapping and surveying to robots that automate big and strenuous tasks like excavating, pouring concrete and moving heavy materials, technology is reducing the amount of human work required on site. This is increasing both productivity and safety.
National Highways is leading the way in this area, and its Connected and autonomous plant (CAP) Roadmap aims to achieve productivity gains of £200 billion by 2040.
Although CAP technology requires upfront capital investment, in many cases automation costs can be kept down by adding smart sensors and controls to existing machinery and processes. The scope for returns on investment is considerable, both for individual programmes and for the industry as a whole; National Highways estimates that CAP technologies could deliver a 20-25% improvement to construction productivity across the board.
The industrialisation of construction
Modern methods of construction (MMC) have long held the potential to be a productivity game-changer. Modular technology - and the way it is used – can be deployed for a more methodical, timely and predictable production process.
The guiding principle of off-site construction is to deliver higher quality projects more sustainably, quickly, safely and cost-effectively than conventional construction. But the need to transport large, pre-assembled modules from factory to site adds cost and project risk, as can the reliance on a limited number of suppliers.
A new approach called Platform Design for Manufacture and Assembly (P-DfMA) has now emerged, in which intelligent designs enable a diverse range of suppliers to provide compatible offsite manufactured components for the same building. This game-changing method of design avoids the reliance on a single manufacturing source, mitigating supply chain risk and speeding up the manufacturing process.
With its production line-inspired efficiency and quality consistency, MMC is especially effective in public real estate projects where standardisation and repeatability of design are critical, such as education, residential and healthcare. P-DfMA is an important consideration on these schemes to avoid reliance on a single manufacturing source and is a key tool for de-risking the delivery of larger projects.
For example, the Department for Education has teamed up with Innovate UK to develop GenZERO, a prototype timber school based on a proven template design in which contractors will assemble a ‘kit of parts’ at an on-site hub.
Meanwhile, the London Borough of Barking and Dagenham is using the mass-produced Ultrapanel Housewrap kit of parts to retrofit net zero efficiencies to ageing homes in the Becontree Estate. The technology is precision manufactured off-site but is small enough to be transported and installed in dense urban areas where craning large panels isn’t practical.
The scheme is created and managed by Turner & Townsend and Energiesprong UK as part of the Mayor of London’s Retrofit Accelerator Homes programme.
MMC is going through a step-change in maturation, advancing from ‘construction in a shed’ to automated, mechanised and collaborative manufacturing. Clients who update their thinking on MMC will boost productivity and value by reducing both time on site and their reliance on increasingly scarce tradespeople.
New talent and skills
Impressive and welcome though they are, construction’s productivity gains offer a pause rather than a panacea for its people's problems. Likewise importing labour from abroad – which was made easier with the easing of UK visa restrictions for construction tradespeople in March’s Budget – provides respite rather than resolution.
Construction is suffering a long-term loss of skilled workers as the number of those retiring, or leaving the industry, consistently exceeds new joiners. No matter how productively it works, a dwindling labour force will eventually cancel out efficiency gains without using technology to find new ways of working.
Existing efforts to tackle the recruitment crisis are struggling, and the number of 16 to 24-year-olds enrolling on construction trainee schemes is now barely a quarter of its 2007 level.
Yet the new technologies and ways of working outlined above – which together have boosted productivity – may also hold the key to solving construction’s image problem among school leavers.
Too many young people still see the industry as low-tech, hard manual labour, with limited opportunities for career progression. However, repositioning construction work as a chance to shape the infrastructure on which modern life runs, while learning highly-prized digital, engineering and robotics skills is now possible.
That’s why the industry must leverage and consolidate the advances that have delivered better productivity today to attract the workers of tomorrow.
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