Construction Sector – Deal or no Deal?

Government plans to increase the construction industry’s productivity will flounder unless businesses across the total supply chain are engaged, according to Peter Johnson, chairman of Vivalda, a UK distributor of rainscreen cladding systems.

Reacting to the Construction Sector Deal, which was finally published in July, Peter said: “While it’s good to see the government recognising the huge potential we have in the building industry, I worry that the confirmed £170 million meant to increase productivity and efficiency of the housebuilding process, will not percolate to every part of the industry.

“And this sharing of innovation is crucial – as we all know that supply chains are only as strong as their weakest link. Our recent experience of working with modular housing projects proves the point that ‘on-time delivery with zero defects’ is the new mantra for the construction sector. While the huge PLC players have the manpower and resource to embrace new working methodologies, it’s the little guys that will struggle without active support.”

Peter points out that while medium-sized, motivated businesses such as Vivalda Group have already embraced technology and strategies to increase productivity and supply chain efficiencies, smaller enterprises employing 25 or fewer people are probably unaware of the Construction Deal. Even worse, if not actively promoted, it could become just another government initiative that goes unnoticed by the majority of building firms.

Statistics from the Office for National Statistics, 2016 show that approximately 54% of all construction companies employ fewer than 25 people, often referred to as SMEs.

Peter concluded: “It’s often these guys that are engaged to supply ostensibly minor elements of a build project, such as window handles, lighting or other sub-components of the structure. While their supply chain performance can go unnoticed in a traditional build, when it comes to the new, off-site fabrication method, this factor becomes crucial. The government may be aiming for a 50% reduction in the time it takes to build a home, but if the supplier of the door knob or guttering isn’t on board with the new mantra – the whole production line is halted. It’s much the same as in the automotive industry, where every supplier signs up to the deal and is given the training and technology to deliver.”

The UK Construction Sector Deal was published, six months later than expected on July 5, 2018. Highlighting the importance of innovation, infrastructure, energy and skills, the plan confirmed £170m investment from the government. It said the money – which should be matched by £230m from the private sector – will be aimed at halving the time it takes to deliver newbuild projects and halving the energy use of newbuilds by 2030.