The knock-on effects of an effective industry are felt throughout the UK, says Paul Nash FCIOB, incoming CIOB president.
Paul Nash
The so-called “productivity puzzle” is a regular topic of debate, and with good cause: the latest UK figures, released in April, show the biggest fall since the financial crisis in 2008.
The government has recognized the risks of poor productivity growth and has made improving it a policy priority. As chancellor George Osborne stated in the first Budget of the Conservative government in 2015: “Our weak productivity shows we don’t train enough or build enough or invest enough. This we are determined to change.”
The government’s concern is two-fold: UK productivity growth has stalled for the best part of a decade, and for years the UK has lagged behind other developed nations.
Improving productivity – labour productivity at least – should pave the way for higher wages. It should make more people buy goods and services because they get better value for money. And it should reduce waste and see resources used more efficiently.
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So what does this mean for the construction industry? For decades, studies have suggested solutions to improve construction’s productivity, yet the data suggests growth is weak at best. So, from the outset, we needed to take a step back and see the bigger picture.
Poor productivity growth in construction is not just a UK phenomenon: in developed nations globally we see the same occurrence, which drags down the performance of the wider economy.
So we might reasonably ask if there is anything inherent within construction that means it will never be on a par with other sectors – can we only automate and standardise so far? Is it being measured in the most accurate way? Are any unexplored barriers holding back progress?
This report seeks to highlight the fact that the construction industry should not be viewed in isolation when talking about how to improve productivity. Construction, and the wider built environment, has a major bearing on how productive we are as a nation.
And the recommendations from this report reflect this approach, with high priority given to the contextual issues – how we can better measure productivity; how we can demonstrate the wider value of construction; how firms can recognise that their current business models may be an obstacle to productivity growth – as opposed to specific proposals.
This report throws up as many questions as it answers. But our focus is clear. The CIOB wants to kick-start the debate into productivity not just in terms of the industry itself, but how construction benefits productivity in the UK as a whole.
