Grant Findlay is executive managing director, buildings at Sir Robert McAlpine
The past few years have presented something of a challenge to the construction industry. For the best part of a decade global supply chains have had to contend with disruption caused by the apparent fragmentation of international trading blocs, as exemplified by the Brexit vote.
“In preparation for future potential instability, long-term plans are being laid to shore up domestic supply chains”
Then came Covid, which unleashed a well-documented wave of disruption. And just as the sector was emerging from lockdown, the Russian invasion of Ukraine – an important supplier of steel, neon and lithium – further damaged supply chains, with the ongoing crisis in the Middle East and the Red Sea only ratcheting up the pressure.
But though geopolitical headwinds have undoubtedly buffeted the construction sector, they have also carried with them opportunity. Construction has not just proved resilient, but capable of adapting too. Economic and geopolitical insecurity has fuelled a growth in onshoring, with the government’s twin energy and industrial strategies reflecting the broad desire within both public and private sectors for the UK to become more self-sustaining.
In lockstep with geopolitical instability, global challenges brought about by climate change and resource scarcity have further driven inward investment in the UK. Industrial projects, particularly core manufacturing, are among those that have experienced a significant boost, as the sector has been recognised as a key ally in developing environmentally friendly solutions. Governments and businesses worldwide are increasingly adopting green-energy solutions as part of efforts to transition towards a more sustainable and environmentally friendly energy landscape, building a cleaner and more resilient energy future.
We have seen these environmentally friendly opportunities manifest in specific projects in the UK that seek to decarbonise existing facilities by moving towards cleaner energy supply and, in the use of recycled materials, embrace circular economy principles by minimising waste and maximising resource utilisation. In particular, we’re seeing primary manufacturing plants, which might otherwise have been built abroad, now being based in the UK.
And it’s not just industrial projects that have experienced a boost. Concern about energy security has fuelled significant interest in domestic energy production too, with the biggest expansion of the country’s nuclear capabilities in 70 years being among the key infrastructure projects backed by the government in the wake of the Russian invasion of Ukraine. The increasingly important green agenda has led to a renewed focus on battery production plants – a critical component to the UK automotive industry – with manufacturers recently ramping up pressure on the government to provide sufficient incentives to attract inward investment to ensure the UK remains a viable base of operations.
Long-term vision
Crucially, onshoring doesn’t appear to be a passing phase. Simmering international tensions, such as those between China and Taiwan, have led to an increased risk to the disruption of microchip production and semiconductor manufacturing. In preparation for future potential instability, long-term plans are being laid to shore up domestic supply chains.
The immediate benefits of onshoring are clear – providing an economic boost for UK plc and helping the construction sector offset any fall in activity in other areas, such as commercial offices – though the long-term effects could be pronounced, too. Investment in UK projects will necessitate similar spending on training to ensure there is the skilled workforce required, while the growth could also present an opportunity for the sector to rethink how it works.
Siloed working and a lack of collaboration have been the well-known keynote of the sector for some years – possibly even presenting a kind of microcosm of the barriers now enveloping the global economy. The speed with which clients expect the freshly onshored projects to be built, many of which have commenced without long tender processes, has taken the sector by surprise and has forced those involved to become more collaborative. The supply chain has had to share vital intel and contractors have been involved much earlier in the project lifecycle than would otherwise have been the case. The sector has been presented with a potential blueprint for sustained, future collaboration, so let’s hope it seizes it.
There could be long-term benefits for infrastructure, too. While the government has always recognised the benefits of investing in infrastructure, not least green energy, a lack of long-term commitment to infrastructure has diminished the sector’s confidence in its own supply chain. The government needs to develop a long-term depoliticised strategy ensuring that, unlike Project SPEED, major infrastructure projects are not used as a political football.
Such an approach would not only provide the UK with the upgraded infrastructure it needs, but would also provide a further incentive for businesses to invest in the UK, ensuring the country maintains its status as the premier construction market in Europe.
The geopolitical headwinds may be blowing, but if the sector adapts, these could as much represent the winds of opportunity as disruption.
