What future for our industry?

What does the future hold for our industry?

On the front page of the Financial Times yesterday was an article about the incredible decline in construction output during 2011. Overall construction workload fell by a staggering 39%. This is the most significant fall for the past 35 years. There were turnover statistics from several of the major construction companies, including Kier and Balfour Beatty, which indicated the considerable reduction in their construction turnover in the period.

The quarterly GEP figures issued for Quarter 1 suggested that construction output was down by nearly 5% in the period. There are no regionally adjusted figures so I would anticipate that the decline in the regions is far greater as the overall figure will be bettered by investment in the South East.

This catastrophic level of change in any industry will inevitably reshape the future considerably. For the construction industry, clearly we will never go back to the past and the type of industry it was over the past 15 years will not be seen again. We are in a period of flux at present where there is little workload or revenue, but at the same time there are improvements in technology which could reshape how we design, deliver and operate buildings for the future.

All businesses are keen to set out a vision of sustainability which looks to provide steady employment and profit for those involved in the businesses, something which is clearly under considerable threat in the construction industry at present.

As I look into the future I believe it is impossible to predict where we will be in 2 or 3 years time. Long term investments are a considerable gamble with the future being so unpredictable. Many firms are shrinking their regional presences and looking to develop opportunities in the South, which will obviously drain talent from the regions. Organisations are consolidating and changing on a regular basis. International markets continue to be the lifeline of most organisations that are able to stay afloat.

This generation has never seen such a dramatic downturn, and construction leaders are drawing on much of their experience to maintain business sustainability. While it may be difficult to predict where any of us will be beyond the next 12 months, all we can hope is that when we do see a light at the end of the tunnel, the future will be different, but secure, as well as exciting and challenging. Hopefully we can all learn lessons from this period and ultimately ensure we all have a better future.

It's just the beginning

How far along the road to recovery are we?

Since we returned to work after Christmas I have sensed a notable change in atmosphere and confidence across the industry.

It seems like a number of organisations are making announcements to reduce their costs since they have returned after the break.

I suspect that during 2010 many companies were hanging on, waiting for the market to improve. Unfortunately that has not happened and is unlikely to happen in the near future. I would guess that when the Directors of these companies sat down and looked at cash in the bank and opportunities going forward, some fairly drastic measures had to be taken.

Consultancies would have looked at their costs and realised the only option is to cut resource to minimise outgoings. It is clear, from the fact that there are several small to medium sized construction businesses that have gone into administration since the New Year due to cash pressures and lack of future pipeline, that in some cases, this has not been enough.

I think this process will continue right through 2011 and beyond. I think the last two to three years and the forthcoming two to three years are likely to be the most significant in construction for at least a century. There are many theories of what the impact of this reduction in construction work will be, but I hope that something positive comes out of such a negative situation.

As an industry we can hopefully embrace this period and look to find more efficient ways of delivering buildings to the highest standard.

The Government is putting huge faith in the private sector to drive recovery and with construction being one of the most significant industries in the country, clearly we will all have our part to play in the economic recovery process.

BIM gets rolling

Over the past six weeks the term BIM (Building Information Modelling) has been used more than ever. At _space group, we have been tracking this technology for over 10 years and were converted a long time ago. The construction industry has now started to realise that there may be something in this new technology. The main driver for this change has been the adoption of the approach from client bodies. This includes the Government themselves, following several speeches from Paul Morell, the Government’s construction advisor, who is supporting BIM and confirming that it is the way all public buildings will be procured in the future. Other clients, such as Manchester City Council, have also stated that all future projects will be delivered using BIM.

Once large scale client bodies have made this jump, the rest of the industry will start to wake up to the need to use it, and hopefully, its potential.

Over recent weeks I have been involved in countless discussions, presentations and workshops with construction organisations who want to understand what BIM is all about. My starting point is always the same. BIM is not the answer to everything and there are some pieces of intelligent software available which do assist the process but there is still a need for experience and construction knowledge. The second point I make is that BIM is not only about training a team how to use sophisticated software but, I believe, is a complete cultural change within any organisation. Without decisions being made at the highest level of all businesses, BIM will not work. Procurement processes and contracts all need to be reviewed and re-aligned to this new integrated process.

We are only really at the start of our journey in the UK regarding BIM as several constructors start to realise the potential and need for this new approach. The architectural industry is still way off the pace and continues to fight against the technology. I believe much of this is fear and also arrogance in that many architectural businesses focus very much on the art rather than marketing needs.

The involvement by constructors has been really encouraging, however the understanding at board level still is a long way from delivery on site. Over the next few years we will see some major successes and failures utilising this approach however, I am absolutely convinced that BIM will be universally adopted across the industry and will deliver projects faster, cheaper and better.