The construction industry’s total output is worth £250bn a year – equivalent to 15.3% of Gross Domestic Product – according to special report commissioned by the CIOB.
The Real Face of Construction gives an audience inside and outside construction a comprehensive overview of the industry in 2014, including its social and economic impact, its broad reach across government departments and its role in the climate change agenda.
Other key findings include the calculation that London’s share of construction output has risen from 16% in 2007 to 20% in 2013, and that 20% of the industry’s workforce is due to retire in the next five to 10 years.
The report is written to sit alongside the CIOB Guide to the Built Environment as a resource for MPs, parliamentary candidates and policy makers, and draws on the latest data and analysis.
The 15.3% figure is calculated by Dr Stephen Gruneberg of the University of Westminster, and represents the total outputs of all activities linked to construction, including the value of construction activities on site, the output of the UK construction materials sector, the value of consultancy and design services, and the equipment hire sector.
"The report tries to see construction in the round – that it has social value and offers jobs and social mobility. And in an economy where we are producing less, it is an exceedingly important industry."
Brian Green, author of The Real Face of Construction
The sector is often described as accounting for 6.3% of the economy, but this figure is derived from the concept of “gross value added”. GVA statistics strip away inputs from other sectors, such as services or manufacturing, to avoid double counting.
Economist and commentator Brian Green, the report’s author, said: “6.3% is really a very narrow description of construction which doesn’t make a great deal of sense to people who work in the sector, and you could say dangerously downplays its impact. 15.3% is a definition of the wider contributions that create the built environment.”
He added: “The report tries to see construction in the round – that it has social value and offers jobs and social mobility. And in an economy where we are producing less, it is an exceedingly important industry.
“But the industry is highly fragmented, there isn’t enough slack in the system, there’s a lot of self-employment and we need to make sure the next generation goes into construction and are better prepared for it.”
The Guide to the Built Environment and Real Face of Construction reports are being sent to MPs and prospective parliamentary candidates to brief them on the socio-economic importance of construction as well as bring them up to speed with how the industry works. The suite of documents will be formally launched at each of the three main party conferences.
The CIOB is calling for holistic strategies to reduce carbon emissions, tackle the shortage of skilled UK workers and use construction as a driver of regional growth. The report demonstrates the wide variations in regional performance and output since the 2007 recession, leaving a need for integrated policy making at a local, regional and national level.
Chris Blythe, chief executive of the CIOB, said: “Construction is often simplistically viewed in terms of employment statistics and visible work on building sites, but this overlooks the increasingly high-tech nature of an industry that is leading on innovation and contributing directly to national productivity.
“The quality of our buildings has a lasting impact on the wellbeing of individuals and communities across all regions and sectors.
“Much political and media attention focuses on house building and, while this is an extremely important issue, it actually accounts for a minority of total UK construction output. We would like to see discussions become integrated into a much wider agenda. The decisions made today will be felt for decades and generations.”
The report drew a speedy response from Labour’s shadow minister for industry, Iain Wright MP, who said: “The report from the CIOB is very welcome. It is a vivid and well-evidenced portrayal of what has happened to the construction industry in recent years. It also shows that any recovery in the industry, although welcome, is disproportionately concentrated in London. This does not provide a balanced and sustainable recovery for the long-term.”
“I welcome the report’s emphasis on the opportunities the construction industry has, if the sector is given sufficient importance by government.”
And Conservative MP Oliver Colvile, chairman of the All-party Parliamentary Group for Excellence in the Built Environment, said: “All over the country there is a real need for builders, plumbers, electricians, brickies and people who are trained in the building trade. It is interesting to note that this paper suggests London is the one place which is booming. However, recent results announced by Persimmon show the wider growth of house building seems to be very encouraging.”
