Construction is the creation of the built environment covering all stages of the construction process, from creating the initial ideas and designs to actually building the structure and ensuring that everything continues to work after it is completed. The sector covers the following areas:
- building infrastructure (such as roads and rail)
- the building of public and private housing; the construction of public non-housing (such as schools)
- industrial building; the construction of commercial premises (such as offices and retail units)
- the repair and maintenance of these constructions
The construction sector is represented by ConstructionSkills Sector Skills Council. ConstructionSkills represents every part of the UK construction industry, from architects to bricklayers. The sector employs 2.35 million people, representing over 8% of the UK workforce.
- There are 2,535,490 construction employees in the UK in around 311,180 enterprises.
- 92% of organisations in the construction sector employ less than 10 people and less than 1% has 250 or more employees.
- 55% of the workforce is employed in manual occupations.
- 37% of the workforce is self-employed, but in some regions this figure is considerably higher (i.e. in London 78% of the workforce is self-employed).
- Much of the workforce is mobile, with 54% having worked outside the current nation/region.
- More than 35% of people in the sector are their own boss running their own companies.
- The reduction in demand for construction work has lead to widespread redundancies across the sector.
Source: ConstructionSkills AACS LMI report 2010, Sector Skills Assessment for the Construction Sector 2009 and Workforce Mobility and Skills in the Construction Sector 2007
Despite some signs of recovery in the house building sector, cuts to major public programmes and weak consumer spending in the repair and maintenance sectors has left many construction firms suffering from the impact and depth of the recession.
Forecasts from the Construction Skills Network show that UK construction output fell by 13% between 2008 and 2009. It is reported that construction output is unlikely to return to 2008 levels for the next four years. By 2011, a reduction of 400,000 construction workers is expected.
Source: ConstructionSkills Strategic Plan 2010-2014 and Sector Skills Assessment for the Construction Sector 2009
Construction workforce levels across the UK have generally been stable over the past 15 years, peaking at 2.7 million in 2007. There has been a strong demand for trades people, professional and technical occupations and management roles, but the performance of the sector has been severely impacted by the recession, which has been reflected in severe job losses.
Construction employment started to fall in 2008, albeit by 1%, however predictions suggest a much larger decline of 11% across 2009 and 2010, with the bulk of the fall in 2009. It is estimated that job losses between 2008 and 2010 are expected to reach around 450,000 amongst contractors and professionals. The number of construction companies facing insolvency is twice the rate that they were at the start of the recession. Employment is expected to begin to grow again in 2011.
Source: Sector Skills Assessment for the Construction Sector 2009
The occupation requiring the largest number of replacements is skilled trades, where a high percentage of craftsmen are nearing retirement age. The estimated replacement demands for this group are nearly one third of a million. Significant replacement demands are also projected for many other groups. These include managers, administrative, clerical & secretarial occupations, professionals and associate professional & technical occupations, as well as machine & transport operatives and elementary occupations.
Source: Working Futures 2007-2017
For most employers in the construction sector, the recession and low or uncertain demand are key issues, so there has been a fall in skills shortages facing employers compared with previous years. Factors contributing to skills shortages, include:
- an ageing workforce within the sector and a lack of suitably qualified new entrants to replace them
- a lack of availability of training within the Specialist Occupations
- a reduction in Graduate Applications (although in the professional sector this is less of an issue)
On the contracting side of the sector, the largest volume of skills gaps (around 13,000) was reported for labourers and general operatives. 6% of labourers and general operatives were described as not being fully proficient. Similar numbers of staff were reported not to be fully proficient, including: managers; painters/decorators; administration; carpenters/joiners; scaffolders; and supervisors.
Many people believe that new products require new skills to design and install them. However, these skills are either an add-on to existing skills or an amalgam of current skills. Roofers for example are now being trained to install solar panels in addition to the traditional skills.
Source: ConstructionSkills AACS LMI report 2010
The UK construction sector is facing a number of fundamental changes over the next few years. The aim is to develop a sustainable construction industry capable of delivering a low carbon future and to meet the current carbon, water and waste reduction targets and future targets that have not been established yet.
The UK Government aims to reduce carbon emissions by 80% by 2050 and to ensure 20% of energy is from renewable sources by 2020. Legally binding targets have been set and the Local Authority Planning requirements include the new Code for Sustainable Homes – Assessment for this is now mandatory.
Specific skills required include:
- Solar Thermal – Understanding of installation issues; understanding of high temperatures and pressures; liaison with other contractors e.g. electrician; maintenance of roof integrity i.e. sealing and bracketry; weather tightness of roof
- Heat Pumps (e.g. water source heat pump) – Supervision of ground works; awareness of potential damage to ground loop post-pressure test
- Photovoltaics – Electrical safety esp. high DC voltages; Inverter trip and failure; Awareness of design issues such as wind uplift; impact of shading/ glare; weather tightness of roof; penetration of roof by fire spread
- Wind turbines – Understanding of installation issues including materials needed to support products e.g. type of concrete; weather tightness of roof; penetration of roof by fire spread
Source: ConstructionSkills website 2010
The future of the construction industry is most heavily affected by the economic climate and changing technology and innovations around construction methods. Future drivers include:
- Globalisation - The worldwide decline in construction activity has impacted on UK professional services, and has been particularly visible in the reduced demand across the Middle East and Asia. As well as exporting skills and expertise the UK construction industry has also benefited from migration. Globalisation has in addition led to increased international competition and in turn demand for higher skills.
- Technology - Over the past decade significant developments have occurred in the prefabrication of structures and components, the standardisation of production, the development and application of new (and out-of-sector materials) and the better integration of information technology in the business and construction process. This shift is likely to mean that on-site construction increasingly becomes more of an assembly process, suggesting that the industry will see a move from construction to fitting. In addition, the use of materials and products from other industries may see a crossover of employees bringing a new range of skills and knowledge into construction.
- Demographics - Demographic changes shape the expectations of customers, as well as influencing the ability of industry to meet their demands. The needs of the population in terms of housing, healthcare, education, infrastructure, work and leisure drive construction outputs are changing. For instance, there are strong aspirations of home ownership, higher rates of divorce and a marked increase in single-parent families.
- Legislation -Government policy around improving the quality of work (working time directive, parental rights, minimum wage, health and safety) and reducing damage to the environment (planning legislation, climate change, carbon reduction commitments, aggregate tax etc) is changing the way the industry works. The impact of the regulations/legislation although mainly centred on housing will affect all new buildings built from now to 2019.
- Consumer demand - Demand across this wide and varied client base that what, where and how the industry builds.
- Productivity and Industry Performance -Productivity improvement remains a central pillar in the overall ambition to up-skill the construction workforce, although efforts to improve performance have also focused on changing the structure and work of the industry.
Source: Sector Skills Assessment for the Construction Sector 2009
A high priority for the construction sector in the future will be to address the global challenge of carbon reduction, as it accounts for 47% of all UK carbon emissions generated. New legislation has been put in place in some parts of the sector, but skills will need to be adapted and updated. The key areas for consideration are energy, water, materials and waste. As a result, the sector is looking towards:
- product innovation
- lean manufacturing
- innovation in manufacturing away from the construction sit
- large scale renewable energy
- zero-carbon (residential and non-residential)
- low carbon refurbishment of existing stock
- low energy buildings
- waste management
- flood risk
- social/behavioural change
The recessionary period of the forecast will last through 2009 and into 2010 as the housing market continues to weaken and demand for industrial, office, retail and leisure facilities declines considerably. There are a significant number of major projects and programmes of work in the sector:
- Work on the main Olympic venues
- M25 widening is scheduled to begin in the spring of 2009 and Crossrail in 2010
- There are major station redevelopments taking place at a number of locations, including Blackfriars and Farringdon (as part of the Thameslink programme), Reading, Birmingham New Street, and Nottingham.
- The Scottish Government’s £3 billion 10-year transport investment plan continues, with M74 redevelopment currently on track and the Glasgow Airport Rail Link to start soon.
Source: ConstructionSkills AACS LMI report 2010 and Sector Skills Assessment for the Construction Sector 2009