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Wednesday Insight: Challenges and Opportunities for Construction

Wednesday Insight: Challenges and Opportunities for Construction

Construction is one of the biggest and most dynamic industries in the UK, and as demand for new homes increases, so too will the number of opportunities in the sector.

Key figures

  • In 2014 the construction industry in the UK contributed £103 billion in economic output, and is one of the most valuable sectors, with growth expected to continue.
  • Just under one fifth of all small, medium and micro enterprises (SMMEs) are in construction
  • The construction industry supported 1 million jobs in 2015
  • The sector ranks second worst in the UK in terms of growth of number of SMMEs

In this blog post, we’ll examine three of the key challenges faced by the sector, and what small, medium and micro enterprises (SMMEs) in the sector can expect going forward.

Market competition

Although the overwhelming majority of construction companies are SMMEs, this isn’t reflected in the market share. A report by the House of Commons Communities and Local Government Select Committee found that more than half of all new homes built in the UK are built by the country’s eight largest housebuilders, meaning the SMMEs that form the backbone of the sector aren’t accessing growth in the market. The Housing White Paper currently underway will be setting out plans to boost the competitiveness of smaller housebuilders. In the meantime, however, boosting the branding of your business can help foster confidence in your services- our training on building a personality for your business can support you in doing this.

Winning big contracts

With so many companies in the market, especially larger companies, many SMMEs in construction struggle to win contracts for particularly lucrative projects. Many businesses consider the visibility of supply chains to be an issue: a recent report published by the Scape Group found that just over half (51%) of SMMEs felt they were not well informed about public sector contracts and how to bid for them. The Building Legacies Programme supports SMMEs to find out about and successfully bid for tendering opportunities- see our supplier section for more information.

Skills shortage

To sustain their rate of growth, builders need to make sure they keep recruiting the best talent- but this is easier said than done. According to the Federation of Master Builders, almost half of all builders report difficulty in finding suitable employees. Many express concern that Brexit will worsen this, with a significant proportion of employees in the sector coming from the EU. To buck this trend, SMMEs need to think seriously about how they can position themselves as good employers and attract new staff at all levels. For more information about the range of support on offer in the Building Legacies programme please contact or call the office on 020 7537 6480.


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