Globally, the construction industry is valued at over £8 trillion, with the UK sector being valued at £164 billion. A key reason for Britain’s profitability within this sector is due to it being largely funded by the private sector, but despite its traditional success, the British construction industry is facing challenging times in 2019.

For the first time in almost a decade, insolvencies in the UK construction sector are up by almost 6.5%. With Brexit imminent on the horizon, many investors are becoming unsure, and are pulling out of contracts.

The 3 key challenges facing the UK construction industry this year are listed below.


1. Rising Competition

The construction industry is a saturated market. Offshore competition is becoming fierce and because of this, profit margins in the UK are decreasing, leaving firms with the need to re-evaluate their outputs and investments.

Due to the competition and their lower cash flow, firms are finding it difficult to reinvest back into their employees and employee development, which is resulting in poor productivity and engagement.

The move to digital and automated process is evolving across the industry, yet many firms are still finding it difficult to reinvest their margin into technology. The inability to bring their business into the future is putting the UK construction market on the back foot, as many firms are unable to compete with the technology that their offshore competitors are investing in.

2. Questionable Performance

As a whole, the UK construction industry has a reputation for being slow or falling behind on projects. We only need to look at the outdated and half-finished government housing initiative and consistently delayed rail service upgrades to understand the construction industry’s reputation for being sluggish.

There are currently gaps in project management operations in the UK, and small errors are blocking progress. The UK construction market does not widely use integrated project reporting, which would vastly improve communications and performance.

3. Labour Shortage

‘Skilled labour’ is a broad term to describe a workforce that can perform a task that requires knowledge, a qualification and a certain skill set. The millennial generation is taking the workforce by storm and statistics are showing that most are favouring digital roles or to begin their own start-ups. The millennial workplace ethics and expectations also vary greatly to that of the traditional skilled workforce.

Senior construction managers are displaying a lack of confidence in their younger workforce and are shunning the necessity to hire and upskill them. Because of this, employee numbers are dropping in some sectors and firms are finding themselves in positions where they do not have the right employee on their books to complete a certain task.

With Brexit looming and confidence slipping, the UK construction industry needs to start future proofing itself. Whether it be investing in their employees, investing in digital enhancement or simply improving communications. To maintain its world-class status, the industry needs to start living up to investor and client expectations.


Lydon Contracting Ltd

Your Total Construction Solution

Tel:  01327 811533