Construction Industry (2021) Outlook
2020 was a year unlike any other and it certainly had a big effect on the UK’s construction industry. We look back at the sector’s recent output and share developments awaiting the industry in 2021.
What are the 3 types of construction?
There are three main types of construction: buildings, infrastructure and industrial.
Buildings are usually divided into residential and non-residential construction projects and involve the development of new buildings for personal and private use.
Infrastructure relates to large, heavy engineering works in the built environment, such as the creation and maintenance of bridges, roads, water and utility distribution.
Industrial covers mining and quarrying, offshore construction, power generation, refineries and chemical plants, plus the development of manufacturing facilities.
Whilst government restrictions changed the way people worked together on-site in 2020, construction work continued during the national lockdowns.
Monthly construction output increased by 1.0% in October 2020 compared with September 2020, rising to £13,066 million. October 2020 brought the sixth consecutive month of industry growth, however data suggests that the overall output that month remained 6.4% (£898 million) below the February 2020 level, before the full impact of the coronavirus pandemic. Of the three types of construction, only infrastructure had recovered above the pre-lockdown level of output.
Total construction output grew by 24.9% in the three months to October 2020 compared with the previous three-month period, due to increases in most areas, driven particularly by an increase in new work and repairs and maintenance across buildings, infrastructure and industrial construction.
Construction employment figures
Whilst the Coronavirus Job Retention Scheme enabled employers to retain staff that may otherwise have been lost, the number of people employed in the construction sector fell by 83,000 (3.7%) from the start of April to the end of June 2020.
In August 2020, industry employment figures indicated that the sector employed a total of 2.24m people.
Major challenges facing the industry
Strategic plan for the sector
In September 2020, the Construction Industry Training Board (CITB) released a new strategic plan for 2021-25.
Supported by the industry levy, CITB has outlined ambitions to modernise construction across Britain, supporting training, improving productivity and making it easier for employers to bring apprentices and other entrants into the industry through strategic collaboration.
The Coronavirus pandemic has created huge challenges for training, but has also brought an opportunity to welcome new workers and career changers to the sector.
Between 2021 and 2025, CITB will invest the levy to:
- Support 28,000 construction taster experiences.
- Give 19,000 people onsite experience to prepare them for work in construction.
- Create a new pathway between Further Education and employment, enabling 8,000 learners (including 1,600 apprentices) to make a start in construction.
- Increase the number of apprentices completing their programmes from 60% to 70% through allocating £110m to support learners and employers.
- Help employers to invest in training to rebuild after the pandemic, and to modernise and improve productivity.
Construction Skills Fund
The Construction Skills Fund (CSF) is helping to balance the effects of Covid-19 and Brexit-related skills shortages, by providing free training to school leavers, people who are long-term unemployed and career changers who want to join the UK’s construction industry.
The CSF helps employers to fill gaps in their workforces, upskilling people on onsite training hubs across the UK and helping them to gain employment in immediately available, required roles.
To date, over 13,200 learners have become employment and site ready, with over 7000 of those coming from traditionally under-represented groups – including women, disabled people and ethnic minorities. By May 2020, 3,327 learners had been placed into new jobs.
Due to its success, in June 2020 the Department for Education announced that the CSF would be extended for another year. By September 2021, another 6,000 employment and site-ready learners will have been trained.
Sustainability and innovation
Sustainable construction involves a change in the types of material traditionally used, rethinking waste and energy consumption, and a greater awareness of how developments may affect the natural environment. Innovations in technology and building designs are helping the industry to evolve and address its environmental impact.
The Government’s Clean Growth Strategy outlines a commitment to reducing the UK’s greenhouse gas emissions by 80% by 2050. The construction industry is working towards this target through its involvement in initiatives such as the Government’s Sustainable Construction Strategy.