We want greater productivity in construction, and we want it now
We want greater productivity in construction, and we want it now
As one of the four main sectors of the UK economy, construction contributes 6.1% to the GDP as of 2017. That’s around £159 billion. It employs about 2.96 million people and had 296,093 registered construction firms in 2016 – an increase of 22,318 compared with 2015. These factors add up to suggest the construction industry has never been more critical to public limited company fortunes. Imagine how much more profit there could be if the construction industry maximised its productivity. At the moment, it’s nowhere near maximum. The McKinsey Global Institute (MGI) released a report in 2017 detailing the construction industry’s intractable problem with productivity.
The issue with productivity
Increasing productivity in the construction industry should be a priority as it will benefit the UK economy as a whole. However, there are challenges in construction that mean productivity often suffers. Some worry that Brexit could make the apparent skill shortages worse, but evidence of this is often anecdotal. Others fear that the outdated business models and long-term lack of investment in skills, technology, systems, and processes may also take its toll.
But, the MGI report detailed other concerning factors that hinder productivity. These include dependence on public-sector demand, informality and sometimes corruption, fragmentation, and an opaque construction marketplace. Driving productivity is critical to the UK economy and for shareholders. The UK government suggests that boosting construction productivity could deliver savings of £15 billion per year.
The next steps
The British government has released a long-term report on ‘Transforming Infrastructure Performance’. The report first suggests a different way of planning construction projects. It suggests that construction companies should move away from strict project-based thinking. Instead, there should be a more strategic mindset that considers the way different networks are interrelated and can affect performance and profit.
This ties in with the second idea that there should be more thought into how to deliver higher value over the whole operational lifetime of projects. Focusing on this rather than upfront capital costs can deliver better value for money in the long run. There’s also working, manufacturing, and constructing in cost-effective ways, without jeopardising the integrity of the project. This is important for productivity.
Short term plan
The previous ideas are ones that will start to make improvements in productivity in the long run. But, we want increased productivity now. Immediate changes should begin with the construction teams and the hierarchies of firms involved in a project. The tendency for construction projects to form teams based on the popularity and size of firms is leading to lower outputs and completion speeds. These factors don’t mean they are the best for the job. It only says they are the most popular.
When companies are used to the status quo, they feel they are guaranteed work in the industry and become lazy. Therefore, there is little need for them to continually try to improve their services to compete with other businesses. So, better analysis of who should be involved in a project can go a long way in ensuring you have a productive team made up of hard-working groups.
If you find that your team isn’t as productive as you need it to be, why not consider using Inscape. We have spent years gathering experience and improving our services to be the most productive manufacturers and consultants during projects. We stick with you every step of the way so communicating what you need is easy. Get in touch today on 0845 230 8565.