The construction industry is in crisis

Whether it’s headlines about poor quality new homes or major building and infrastructure projects running late and over budget, the story is one of an industry increasingly exhibiting the symptoms of structural decline: an ageing workforce unreplenished by a younger generation, which is turning its back on the poor image of construction; an industry where lack of process, requisite levels of skills and competence, accountability and even basic financial viability have been laid bare by the Grenfell Tower tragedy, the collapse of Carillion and the ongoing rumours of other imminent major supply-chain failures.

There has never been more urgency to reimagine the home-building process

That means taking inspiration from the automotive and aerospace sectors. This analogy constantly gets pushed back by from cynics who prefer to revel in the misery of “construction will never change – it’s always been like this.”But we have brand-new drivers for change. You only need to look at the distress on the high street for an example of a sector that just could not see the future coming.

We are approaching our ‘retail moment’

Change will be partly necessity-led; the insufficient resourcing I’ve described will force productivity to improve through manufacturing and technology adoption. Labour scarcity will insidiously force up wages but will lead to even more quality problems, as skills and competences are stretched. For developers and builders, this will become a financial and reputational risk that is no longer palatable. Improved building regulations and insurance industry requirements will usher in change.

Change will also be partly consumer-led. As technology and manufacturing combine forces, the new customer proposition will far outweigh doing business as usual: it will be underpinned by an ‘off the shelf’ level of price certainty, more customisation and choice, unconstrained high-quality architecture and design, and smart technology embedded into homes. All this will deliver a higher technical build quality and a better occupational experience than a traditional build. Customers will vote with their feet.

The construction site of the future is gradually starting to show itself

Digital tools are now used on construction sites, from laser scanning, drones, and photo and video record keeping, to GPS inventory management. But what is less prevalent is the change to more manufactured design and construction techniques. An increasing variety of digital manufacturing techniques mean parts of, or whole, houses and apartments can be pre-constructed prior to final installation – and all at a comparable price to traditional alternatives. Developers and contractors are slowly realising the only way to improve margins or better underwrite quality is to reduce site-based labour and get more work done in controlled conditions. This is already happening through ‘hybrid’ designs, where buildings are designed with traditional and pre-manufactured elements alongside each other. This is less visible and newsworthy than the much vaunted ‘modular’ homes that arrive on the back of a lorry. But, in my opinion, it’s the approach that will be most often used, and will be at the vanguard of change.

The move to ‘factory-made homes’ will mean greater use of digital design and planning tools

Some of these changes will lead to the use of remote production factories, and even near-site or on-site factories. In these, parts of buildings are pre-manufactured near the final location and then lifted into position. This ‘flying factory’ approach is increasingly enabled by cheaper and smaller-scale digital machinery such as CNC cutting, roll-forming machines and even 3D printers.

For all these reasons, I believe we’re finally entering the period when construction begins to transform itself. It’ll still take time, and there are major deep-seated behavioural and institutional barriers to change. As I said back in 2016 though, it will ultimately be a case of ‘modernise or die’.

Mark Farmer is CEO of Cast Consultancy and author of the 2016 Government review ‘Modernise or Die’.