Our sector has the power to lead the economic recovery – but we must work together, and in new ways, in order to seize that chance.
In the last few weeks alone, the WHO has confirmed over 400,000 deaths worldwide from covid-19 and the OECD has reported that the global economy is experiencing the deepest recession since the Great Depression of the 1930s, with GDP declines of more than 20% in many countries during shutdowns. In the four decades I have worked in the construction industry, I don’t think we have ever faced a bigger challenge than today: a world health crisis with deep financial consequences and much uncertainty about the future of our industry and the global economy.
Although many UK construction sites have now reopened and the wheels are beginning to turn again, we all know the industry has been dented dramatically. After at least a month of standstill many projects are behind, and although contractors are reporting productivity is back to around 60% of pre-pandemic levels there will undoubtedly be economic fatalities in our sector.
In my role as global board director at Rider Levett Bucknall, and as a member of the Construction Leadership Council (CLC) supporting its Road to Recovery plan, I believe our sector will be crucial in leading the recovery and redevelopment of the UK economy. We need to ensure construction becomes one of the levers to stimulate growth and help us regain our foothold, rather than an economic victim.
Construction employs about 2.4 million people across the UK, accounting for more than 7% of all employment. By keeping redundancies low and retaining jobs within our industry, we automatically boost employment figures nationally. Some might say we are not the only industry to do this – look at the hospitality sector or healthcare, both of which have been deeply affected in different ways by the outbreak of covid-19.
However, where the built environment differs from other industries is that our supply chains are wide and varied, meaning a second tier of manufacturing and purchasing is stimulated as a by-product of our industry’s revival. The outbreak of covid-19 has made us procure more locally for both labour and materials, making supply chains more UK-based and thus growing our economic ecosystem. The CBI reported in February – before we were hit by covid-19 – that £1 spent in construction creates £2.92 of value to the wider economy.
But there is more. Not only will construction maintain the employment market and create demand for the supply chain, but also the projects themselves – whether a warehouse or a data centre – create more employment and stimulate growth on completion. So, construction by its nature creates a circle of recovery.
However, it is not just the government’s responsibility to get construction up and running again so it can kick-start the economy. We all have our part to play in rejuvenating our industry and the wider economy. This is the time for all of us in construction to become pragmatic and to truly align our collective interests for the better good of the industry.
The government and the CLC are encouraging collaboration and seeking joint solutions, so that for instance if contractors are seeing an increase in materials costs, clients should acknowledge this as a genuine unforeseeable risk rather than demanding costs remain at pre-covid-19 levels. But as a quid pro quo, let us consider how productivity can be increased. Around the country contractors are showing that when crisis necessitates innovation they can rise to the challenge, with new ways of working. Those that have already been implemented include extended site hours, more offsite production and novel ways to maintain social distance.
Now is the time for us all to think differently and do our best to bring our industry out of this crisis and put construction at the forefront of the recovery. Let’s bring into the mainstream the offsite manufacturing we have been talking about for the last decade; let’s revisit the contractual arrangements that cause conflict and become obstacles to our industry rising up again. Let’s take some of those ideas in the R&D departments and put them into practice.
We need to acknowledge that certain sectors will take longer to recover, or may never look the same again, such as retail or leisure. So let’s move forward to focus on those areas that can recover more quickly, or that can be repurposed to suit our current and future environment. Let’s ensure we are learning the lessons of the crisis from which we are (hopefully) emerging, before a possible second wave hits us again, so we can be ready and prepared next time. And let’s remember that if we don’t move quickly, other countries’ confidence in the UK will abate and they will take the opportunity to build and prosper where we paused for thought. Let’s be the victor, not the victim.
We know we are in the strangest of times; that the forecasts and plans we had at the beginning of this year have had to be torn up and started again. But we also know that as an industry we are in an enviable position where the impact of our activity can cause a massive economic ripple across the seas of uncertainty. Let us be pragmatic, set our differences aside and bring our collective interests together, putting our sector to its best use – literally rebuilding our country.
This article originally appeared on building.co.uk
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