Construction industry - employment, new orders, output. Construction 2025, the Farmer Review and the Construction Sector Deal.

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Impact of the coronavirus (Covid-19) outbreak

Like all industries in the UK, the construction industry is being affected by the coronavirus pandemic. The Library has published information about the support available to businesses which have been affected by the virus. The Library also has a list of publications and resources about coronavirus in general.

Key statistics

In 2018, the construction contributed £117 billion to the UK economy, 6% of the total.

Economic output in 2018 was slightly down on 2017, the first fall since 2013.

Output

There are 2.4 million construction industry jobs in the UK in Q2 2019, 6.6% of all jobs. There are more construction jobs now than at any time since 2007, although throughout this period, roughly the same proportion of jobs have been in construction.

The construction industry is unusual because of the high proportion of self-employment in the sector – 36% in Q2 2019, compared to the average for the whole economy of 13%.

Self-employment

New orders to the construction industry were worth £61.7 billion in 2017. This is 13% down on 2017, the first fall since 2011. New housing orders accounted for 35% of all construction orders, commercial orders accounted for 25% and infrastructure orders accounted for 19%.

Policy

The Government’s strategy for the construction sector was set out in Construction 2025, published in 2013. It included the following aims:

  • A 33% reduction in both the initial cost of construction and the whole life cost of assets (from 2010/09 levels).
  • A 50% reduction in the overall time from inception to completion for new build and refurbished assets (based on industry standards in 2013).
  • A 50% reduction in greenhouse gas emissions in the built environment (compared to 1990).
  • A 50% reduction in the trade gap between total exports and total imports for construction products and materials (from February 2013 deficit of £6 billion).

The Farmer Review, Modernise or Die, which examined labour force and skills issues in the sector was published in October 2016. It made found deep seated structural issues in the sector, including a manpower shortage, a widening skills gap, a poor reputation, inadequate training and a lack of policy and industry oversight.

The Farmer Review’s recommendations are sweeping, and include:

  • A new system of governance for skills, recruitment and training by the Construction Leadership Council
  • A reformed Construction Industry Training Board
  • Increased R&D spending and incentives to encourage off-site construction and modern building techniques, particularly in housebuilding.

The Farmer Review and Construction 2025 informed the Construction Sector Deal (part of the government’s Industrial Strategy). The Construction Sector Deals main policies include:

  • The Construction Leadership Council made up of government officials, academics, construction firms and construction clients. It works to coordinate policy in the sector and highlight upcoming challenges
  • The Transforming Construction Programme to lead innovation in methods of construction, training and recruitment;
  • Support for skill development and retention through a reformed Construction Industry Training Board
  • Improved use of modern construction methods
  • Improved business practices, including prompt payment of small firms.
  • Commons Research Briefing SN01432
  • Author: Chris Rhodes
  • Topics: Industry

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