What can the construction industry expect in 2020?

The construction industry is evolving, which means making accurate predictions for the future very complex. But as we move into a new year with slightly more certainty than we had on entering 2019, what changes can we expect to see in 2020?

Now that the Conservatives have a majority Government, we have greater certainty around one of the key areas that’s affecting businesses across all sectors: Brexit. We can now expect to leave the EU on 31st January, and this should give construction businesses more confidence in their decision-making.

However, Brexit’s not the only upcoming change that construction businesses will need to factor into their plans – there are a range of items that we can expect to influence our decisions in 2020.

So, here are some of the events we foresee in the new year:

Increased investment in infrastructure

Many within the construction industry will be hoping that the Conservatives deliver on their promises for greater investment in infrastructure, which are ambitious. Some of the projects they have committed to investing in include Northern Powerhouse Rail and the Midlands Rail Hub, as well as 40 new hospitals by 2030 and a million new homes over the next five years. In total, they have promised over £100bn in funding for infrastructure by 2025, so we can expect to see a number of large tenders coming to the market in 2020 to cover all of this investment.

We also hope to see the Government make some critical announcements and decisions around a number of ongoing reports and reviews that affect the construction industry. We’re waiting for the findings of the Hackitt report to be implemented, for example, and we can expect to see further recommendations around improving fire safety in construction when the second phase of the Grenfell inquiry concludes. The Government will also be making a decision on the future of HS2 based on the findings of the Oakervee Review, although phase 2a (which will run between Birmingham and Crewe) has already been given the go-ahead by legislation proposed in the latest Queen’s Speech.

A fresh approach to procurement

 As the industry continues to evolve, construction companies will need to modernise their approach to the procurement process, whether they’re buying or supplying. With increased scrutiny around the significant impact the construction sector currently has on the environment, for example, buyers are more likely to seek out environmentally conscious suppliers, and suppliers will need to be able to demonstrate their green credentials. We also expect the social value of projects to continue to gain increased importance. In public sector bids, it’s already fairly typical for social value to account for 10-15% of the technical/quality scoring, and this is likely to filter down into private sector projects in the near future.

The collapse of Carillion and other large contractors in the past few years, along with the public’s sector’s target of increasing procurement spend with small to medium enterprises (SMEs) to 33% by 2020, should also mean that the spotlight is now firmly on supporting SMEs during the procurement process.

Challenges prompting change

There are a number of pressing challenges facing construction companies that could encourage them to make some positive changes in 2020. The ongoing issue of finding skilled workers in an ageing workforce that has skills shortages is likely to worsen when we leave the EU, for example, if the skilled European workers we rely on choose to (or are required to) leave the UK. Companies that want to continue to thrive after Brexit should be looking to increase the diversity of their workforce, as by making the sector more welcoming to women and people who come from black, Asian or minority ethnic (BAME) backgrounds could significantly boost the construction candidate pool.

If the Government presses ahead with its ambitious infrastructure goals, construction output will need also need to increase substantially, which will be a real opportunity for construction companies. However, it’s likely that businesses will need to explore new methods of construction to ensure projects are delivered on time and as efficiently as possible, so we expect to see more construction companies starting to move towards off-site construction in the near future.

Supporting you in 2020

Our industry is constantly evolving, and Constructionline is here to support buyers and suppliers every step of the way. We know that buyers are looking for high-quality, reliable suppliers, and that suppliers are striving to stand out from the crowd when bidding for projects, so we’ve designed our platform to make procurement easier for everyone involved. To find out more, please visit our Buyer and Supplier pages.

Blog Buyer, Buyers, Public Sector, SMEs, Brexit
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