The UK Construction and Infrastructure Landscape: Looking at the future

Historically, the lion’s share of the construction industry was developed by the private commercial division, followed by private housing. Nonetheless, Covid-19 seriously affected the industry with a record fall of 16.3% in 2020. In the Covid aftermath, a new reality has occured. From 2021, private housing and public infrastructure are the main contributors to the growth of the industry, as private commercial sector has been affected by inflation and the war in Ukraine.

In 2021 onwards, the industry managed to recover relatively rapidly. An annual growth rate of 9.57% is expected (CAGR 2022-2027). According to the Office of National Statistics the revenue in the sector of construction is estimated to reach $437.90bn in 2022. With more and more construction firms registering, especially in the area of Wales, there is going to be a demand of 53,200 additional workers annually by 2026 to meet the needs of the industry (CITB). Almost 30% of the construction firms are located around London and the South-East of England. 

The big players in the construction and infrastructure industry are: Balfour Beatty Plc, Kier Group Plc, Vinci SA, Royal Volker Wessels Stevin NV, Actividades de Construccion y Servicios SA, Skanska AB, Costain Group Plc, Mace Group Ltd, Sir Robert McAlpine Ltd, and Bouygues SA.

As of construction consulting firms some of the leading companies are: AECOM, WSP Global Inc., Mott MacDonald Group Ltd, Arup Group Ltd, Jacobs Engineering Group Inc., SNC-Lavalin Group Inc., RPS Group Plc, Tetra Tech Inc., Grimshaw Architects, and Foster + Partners Ltd.

It is clear that in both sectors, national and international companies have the ability to flourish.

Greener Buildings. 

Though the sector contributes a lot to the economy, its carbon footprint cannot be overlooked, as 40% of UK emissions are from the built environment. The UK government, committed to the net zero goals of 2050, in the framework of Paris Agreement, developed a Ten-point plan for the “Green Industrial Revolution”. The 7th point of the plan included the “Greener Buildings” goal. The policies that are going to be implemented target sustainability of the environment, job market, and economy. “Greener” buildings with energy efficiency are able not only to protect the environment but also minimize the expenses, and increase the safety of households, businesses, and public buildings. 

More specifically, this scheme is set to generate around 50,000 new job opportunities until 2030 and around £11 billion of private investment during the 2020s. In addition to that, the energy requirements for every building will be strengthened, guaranteeing less cold houses and helping households and businesses reduce their bills with minimal effort, as well as being safer for the tenants. This is going to be achieved with various schemes and grants like the Future Home Standard, Green Homes Grant, Public Sector Decarbonization Scheme, Energy Company Obligation and many more. All these schemes aim to encourage investments towards sustainability and construction with public support. 

Another interesting takeout -apart from making the building energy efficient and resilient- is the investment in new forms of energy. For now, the investment in hydrogen heating, an electrified heating system, or a mixture of both is explored whilst piloting other options as science evolves.  

Designing a more sustainable future. 

It is clear that the UK is a market with great opportunities for construction and infrastructure companies as more and more projects will take place in near future. It is estimated that approximately 29 million buildings will need to be retrofitted to achieve the green goals. 

In order to achieve the Net-Zero goals there is a lot of work needed both from private and public sector. First and foremost, investment in Reasearch and Development (R&D) continuously rises and needs to be further developed. In 2021 R&D in the sector saw a 18,5% rise compared to 2020 and was estimated at £471m, an all time high.

According to the Construction Industry Training Board, companies in the industry will need to develop the capacities and capabilities of construction training provision for their existent and future employees. This training has to focus on green skills.

Except for changes and cuts in bureaucracy, stricter standards and a cultural shift towards green development is also essential, in order to create the needed demand from the house owners and encourage companies to implement the green goals.