In 2013, in partnership with industry, the UK government (then the Conservative/Lib Dem coalition) released the ‘Construction 2025 report. The documents outlined a joint strategy in which industry and government could work together to shape the future of the construction industry, both in Britain and in a global context. However, it failed to take into account major events of the last few years – so is it still relevant?
Where does Britain stand today?
In 2013, the construction industry employed 2.9 million people in around 280,000 firms and added £90 billion to the British economy. The industry has experienced growth in the last four years, despite the turbulence caused by 2 national elections, the Brexit referendum and the falling pound. British construction firms are in high demand abroad, successfully pitching for work around the world. In addition, the UK is world-class in several emerging construction fields, including sustainable construction.
How will Brexit shape the workforce?
At the time of writing, in summer 2017, it’s impossible to accurately predict the exact impact of the Brexit referendum. However, it’s clear that the writers of the Construction 2025 report had no idea that the British workforce would be reshaped by such a momentous decision. As an EU member nation, Britain had access to skilled and unskilled labour from across the continent. While this may have been responsible for keeping wages low in some sectors, it also gave firms access to specialist skills in short supply in the UK and higher numbers of skilled and unskilled tradespeople than would otherwise have been available. It’s unclear how many construction companies will lose their European staff members after Brexit is complete, but it seems likely that it will be much harder to hire new workers from outside the UK. This may make building costs more expensive as firms compete for a smaller pool of workers.
The impact of the falling pound
Another factor the Construction 2025 team couldn’t have predicted was the dramatic drop in the pound after the Brexit referendum. The pound fell overnight, and has stayed low over the last year. In real terms, this means that any materials imported into the UK have increased in price by around 15%. This, of course, has a major impact on both ongoing and planned construction projects at every level. In today’s highly connected world, we’re no longer building houses out of whatever local stone happens to be available but instead using materials from around the world. A 15% jump in prices has wrecked many project budgets and will continue to affect costings until the pound strengthens.
While it’s clear that the Construction 2025 document failed to predict some of the major forces currently shaping the industry, it’s clear that the overarching message of the document remains true: the construction industry plays a vital role in the British economy; British construction expertise is world class; and with a cooperative effort from industry and government, these strengths will multiply. At Pure Construction, we’re tackling the challenges posed by current events and recent turmoil and looking forward to a bright future. We’re ready for 2025.