What You Can Expect for the UK Construction Industry in 2022
We’ve been studying a number of UK construction forecasts for 2022 and beyond, and are pleased to confirm that the outlook appears to be (mainly) positive. Here are our top five construction industry predictions.
Prediction 1: Construction Materials – Prices and Demand Will Keep Rising
In 2021, the price hikes for many raw materials used within the construction industry were eye-watering. Iron and copper were particularly shocking – in fact, by July 2021, the price of iron ore had shot up by 97% compared with the previous year (Source: Office of National Statistics).
Of course, it wasn’t just raw materials that were affected. Homebuilding and Renovating reports that essential construction materials like roof tiles, cement and steel were often in short supply during 2021, accompanied in many cases by higher prices.
The Monthly Statistics of Building Materials and Components report published by the Department for Business and Energy and Industrial Strategy, confirms that construction materials costs rose every month during 2021. In October 2021, prices for all building work were up 24.5% in comparison to October 2020. And it seems likely that the upward trend will continue in 2022.
According to the New Civil Engineer, the Construction Leadership Council reported that product supply had improved in some areas, but is still likely to be “under strain” this year.
Interestingly, timber imports went through the roof in 2021, breaking all previous records. PCB Today expects that there will be more emphasis on building with wood, not just because it’s ideal for speedy and lower-carbon builds, but also because it’s the perfect material for off-site construction (see MMC section below).
Prediction 2: Industrial and Health Projects Will Increase
We should see growth in construction projects within the industrial and health sectors next year.
Walk down any high street and you’ll recognise the impact of changing UK consumer habits. Several household names no longer have a physical presence in town centres. They’ve either closed down or taken their business online. To keep pace with the phenomenal rise in online shopping, many new warehouse and logistics facilities will be constructed in 2022.
It looks like there’ll be plenty of building going on in the health sector too, as the government has earmarked £4.2bn of funding for the NHS. The money will be used to construct 40 new hospitals by 2030 and to give over 70 existing hospitals an upgrade. In the next four years, the government will be spending £1.5bn on building modern ‘surgical hubs’.
A number of major civil engineering projects are within touching distance too, according to PCB Today. Examples include the Silvertown Tunnel and the expansion of the Sofia Wind Farm, as well as many road infrastructure projects and schemes related to HS2. The expectation is that these will all drive activity in the construction and property sectors for the next two years.
Prediction 3: More Safety Measures Will Be Introduced
Taking on board lessons learned from the Grenfell tragedy, the Building Safety Bill will introduce a raft of important changes to the construction, maintenance and safety requirements for some buildings.
The Bill will strengthen the regulatory system for building safety. It will affect pretty much everyone who designs, builds, manages or occupies ‘higher-risk’ buildings. The new rules will apply to buildings that are at least 18 metres high or have at least seven storeys and have at least two residential units. Hospitals and care homes with this height threshold during design and construction are also included.
The Bill will bring in new regulations concerning fire safety and the quality of products used in construction. Responsibility and accountability for buildings won’t end when the construction has been completed – they will continue throughout the buildings’ lifecycle.
If all goes to plan, the Bill will get Royal Assent by June 2022. The new building safety regime will then be overseen by the Health and Safety Executive.
As the Bill includes a strong emphasis on accurate record-keeping, we’re expecting to see increased demand for enterprise resource planning (ERP) systems that simplify and automate this task, to help companies maintain the construction industry’s all-important ‘golden thread’.
Prediction 4: Digital Transformation Activity Will Rocket
In early 2020 we published an interview with Rob Driscoll, Director of Legal & Business at ECA, about the digital transformation being the key to long-term survival within the construction industry.
It’s no secret that construction is lagging behind many other industry sectors in the digitalisation stakes (retail is a great example). But the Covid-19 pandemic has inspired many construction companies and contractors to dip a toe in the water.
McKinsey’s June 2020 report, The next normal in construction, produced some interesting findings. In a survey of 100 construction industry COOs, 62% of respondents felt that Covid-19 would accelerate the transformation of the construction industry; and 53% confirmed that their company had boosted its overall investments in order to adjust to “the new future”.
Our experience at RedSky gives weight to McKinsey’s predictions. We certainly saw an increase in demand for our collaborative, cloud-based ERP system during 2020 and 2021. At a time when face-to-face meetings were discouraged for health and safety reasons, our clients were able to continue collaborating remotely with their colleagues and stakeholders, with secure access to the latest documents and real-time data.
With so many people who have now got into the ‘work from anywhere at any time’ groove, we’re expecting hybrid working to remain a popular option this year.
Prediction 5: MMC Will Accelerate
The UK housing crisis has been widely reported in recent years, with many flagship projects delayed during the pandemic. The crisis shows no signs of abating in 2022.
The country now needs to catch up for the lost time. That’s why many people in the construction industry are expecting modern methods of construction (MMC) to really take off in 2022.
Key MMC methods, like offsite manufacturing techniques and using natural materials, bring many benefits. Compared with traditional approaches, MMC often achieves faster completions and a lower overall carbon impact for building projects. It sounds like just what the UK housing sector needs… Perhaps this will be the year when more local authorities start to bite the modular affordable housing bullet?
How To Make Sure Your Construction Business Thrives in 2022
The predictions outlined above are just some of the many that we uncovered during our research for this blog.
For your business to thrive in the ever-changing UK construction landscape, you’ll need to remain vigilant, agile, flexible and willing to embrace new ways of working. If you’ve not yet embarked on your digital transformation journey, we recommend that you make it a priority.
Now is a great time to join the growing number of construction companies and contractors who are taking their first steps in digitising their processes.
RedSky has been developing construction-specific ERP software for several years. Our award-winning system is helping hundreds of construction companies across the UK to streamline their processes, boost efficiency, drive up productivity and gain a competitive edge.
Don’t allow your organisation to get left behind. Get in touch with Redsky specialists via telephone at or email (email@example.com). Whether you are considering switching from your existing software provider or if you simply wish to automate processes, save time and reduce manual work; you can request a no-obligation consultation with one of our specialists, and decide whether it’s the right solution for you.