A new series of reports from the Chartered Institute of Building will examine the true value of the construction industry to the economy and wider society. Director of policy, research and public affairs Eddie Tuttle discusses the importance of the sector and the first study, which looks at the industry in Scotland
The Chartered Institute of Building (CIOB) has long been an advocate not just of construction professionals and professionalism but of the construction industry as a whole and how valuable it is both to society and the economy.
In a series of newly commissioned reports, the CIOB will lay out exactly how valuable construction is in order to continue making the case to government and other sectors that our industry has an absolutely key role in a vibrant and sustainable economy.
The quality of our built environment affects every member of society. It influences productivity and wellbeing at home and at work. Official figures suggest that in 2018, the construction industry accounted for approximately 6.1% of total gross value added (GVA) to the UK economy. At more than £100bn annually, that is significant.
But this grossly underestimates the true reach of the industry. Official figures only include ‘on-site’ construction activity, ignoring a significant chunk of industry work that is carried out offsite, such as design and consulting, planning, surveying, self-build, plant and equipment hire and the manufacturing of construction products. The value added by, for example, architects, engineering consultants, quantity surveyors and other professionals working directly within what we might think of as the construction sector, is counted within services. Plus, those making the materials and components come under manufacturing.
This matters because the scale and importance of the sector are often underestimated. A wider view of the sector which incorporates these roles, and more, is estimated to contribute around 10-15% towards GVA. It’s important to note that construction is in a unique position compared to other industries in that it employs large numbers of skilled and semi-skilled workers, while employment in other nonservice industries dwindles.
For those who struggle with academic life or prefer a more ‘hands-on’ job, construction provides a route to a solid career with many opportunities. Professional bodies, such as the CIOB, enable those in trade roles to progress through to professional status as Chartered Construction Managers. Innovative technologies are also transforming the construction sector, revolutionising daily tasks on-site and in the office. Companies increasingly need to recruit a new breed of worker, strong in digital and data management skills and ability to collaborate across several technical disciplines.
The challenge is ensuring that we have a construction industry that’s fit for the future. The Construction Industry Training Board’s (CITB) Construction Skills Network 2019-2023 report refers to this, indicating that construction output is expected to grow by 1.3% over the next five years, with 168,500 jobs to be created.
To show just how important the sector is, the reports we are producing will provide a snapshot of industry performance and we are using the launch of our Scotland report as a starting point for some of the conversations that need to be had within our industry.
As Kevin Stewart MSP and minister for local government, housing and planning, pointed out in his recent blog for the CIOB, Scotland has long been famed for its engineering and construction. He added that the “the last couple of years alone have seen the completion of two internationally renowned projects – the Queensferry Crossing bridge over the River Forth, and the magnificent Victoria and Albert Museum in Dundee.”
The Scottish Government’s investment in these projects forms part of a wider programme to transform Scotland’s infrastructure. They recognise that having a modern, efficient infrastructure is vital to attracting investment.
Among the headlines in the report focusing on Scotland:
- Scotland’s construction sector emerged faster from recession than most of the UK. However, its path since 2015 has been less vibrant with signs of output falling.
- The contribution of infrastructure to the construction sector over the past three years has been higher in Scotland, at 20%, than the GB average of 12%.
- Although trends indicate infrastructure work looks set for a drop, new housing, particularly in the public sector, is expected to grow.
- Employment is set to expand slightly between 2019-2023. The region is forecast to have an annual recruitment rate of 2,790 new workers each year (approximately 12 new recruits for every 1,000 currently in the workforce).
Kevin Stewart has claimed that Scottish Government investment has already helped Scotland to become the UK’s most attractive location for foreign direct investment outside of London.
To support the delivery of their National Infrastructure Mission, the Scottish Government has established an Infrastructure Commission and will publish its next Infrastructure Investment Plan by June 2020 (which will cover the next parliamentary term).
As part of this, there are plans to continue to support the mixed-use development of Edinburgh’s St James Quarter and provide further investment for the £1bn Dundee Waterfront Development.
In addition, through the Building Scotland Fund, there will be £150m to support the development of housing across all tenures, modern industrial and commercial property, and business-led R&D projects.
It’s vital that we work with the construction industry in a way that helps it thrives, delivers value for money, better quality and more sustainable projects for the people of Scotland – and for the other UK regions, particularly when we have the full suite of reports, detailing the activity and opportunities available at a local and regional level.
For example, one specific CIOB recommendation from looking at the data for Scotland is that there are huge benefits in examining how to moderate volatility in the Scottish construction industry; trying to take steps to smooth out the work so that the sector is not so reliant on infrastructure projects. As one practical output of this approach, during upturns and downturns, there should be less volatility in the workforce, with fewer workers leaving the industry.
Understanding how the built environment is performing nationally and regionally is hugely important for tackling some of the key issues the industry faces.
One particular area we are making strides in is improving quality in the built environment. While our profession is often hugely successful, there are also still far too many instances where things go wrong, the situation with the closure of several Edinburgh schools in 2016 is a case in point. We are responding to the challenges, not just at a central government level, but also the Scottish Government’s Building Standards Futures Board is seeking to improve the performance, expertise, resilience and sustainability of the Scottish building standards framework and services across Scotland.
It’s clear that we all want the construction sector to be more sustainable, productive and innovative and we want to help all companies involved to enhance the sector’s contribution to the economy.
The construction sector faces many challenges, but we will continue to support the sector to seize the opportunities ahead in each region and do all we can to position our industry as being at the forefront of innovative practices and transformational change.
Director of Policy, Research & Public Affairs
Tel: +44 (0)1344 630700