How many Construction companies are there in the UK right now? (to the nearest thousand?)
Occording to the ONS figures released in 2016, the answer is 302,000. (This represents a yearly growth of 11.8%) link here
The Construction Industry is now the third largest in the UK, after Agriculture, forestry and fishing and Production (Mining, quarrying, utilities and Manufacturing). While this means the industry is seeing huge growth, it also means something else – that the industry is becoming more vulnerable to the law and industry regulators.
Today, BuildUK announced that for reasons which remain largely undisclosed, they are changing their policy on building hats. This change will see the removal of the general yellow hat in favour of different colours to match that contractor’s role / skill level.
The new policy will not be fully introduced until January next year, but will have sweeping effects right across the UK market.
Who are BuildUK?
BuildUK was created as a result of a merger between the National Specialist Contractors’ Council (NSCC) and UK Contractors Group (UKCG) in 2015.
As an organisation, they set rules for representation for member clients right across the construction supply chain. This includes Construction Clients, Main Contractors and the leading Trade Associations – representing 40 trade associations, over 11,500 Specialist Contractors, and some of the UK’s biggest contractors like Kier and Balfour Beatty.
The Danger of Industry Changes
The Construction Industry has had two main drivers for the astonishing growth over the past five years. The first has been the introduction of many new independent contractors, notably from outside the UK, making the market extremely competitive in price.
The second key driver is Global investment. With London housing seeing astonishing returns, a price competitive market and relatively low risk of loss compared with other routes to capital investment, the UK housing market is currently primed to capture investment from all over the world.
While this trend looks set to continue, there are two key factors that could potentially stifle, limit or even stop this growth entirely.
The first is a decrease in price competitiveness. If industry standards or requirements change and only larger companies are able to tender for large construction projects, which in turn then introduce a number of regulations and controls to push smaller independent contractors and sub-contractors out of the market, the cost of building and development gets larger.
Linked with this is a reduction in foreign investment. If regulatory controls become too strict and profit margins begin to narrow, investors will undoubtedly start focusing in areas where they can match their previous returns. This may mean focusing on other local areas such as Ireland or Western Europe.
Playing with Fire
With so many companies, and families, relying on the growth of the construction market to survive, it seems an odd moment to be introducing a guideline that seems stuck in the past. Rather than establishing a new and predictable safety precedent, it seems that BuildUK are forcing changes that will incur costs and red-tape rather than fixing one of the many actual challenges faced by the industry.
The worry is that while the change itself is relatively tokenistic, the trend of establishing strict policies which burden the entire industry with new costs may be met with more hostility than expected. While a new building hat may only cost around £20, this cost is potentially multiplied by 300,000 companies, which in turn is only half of the story. The cost of having spare hats of each colour will become a requirement following the change in January.
Not only will this change introduce new costs for building companies, but it is guaranteed to have an impact one something a little more unexpected – web designers! Almost every picture on every single construction website has a picture of a builder wearing a yellow hat.
Again, while this may seem like a small factor, it applies to every Construction company with a website. The economics of this, while interesting for its own sake, is almost irrelevant in this case. However the example speaks to a critical issue which needs to be raised. In today’s world where small and seemingly unimportant decisions can have wide, sweeping and extremely harmful impact on business, it may be wise to focus attention on areas of positive change.
Evidently the change is being made to ensure everyone on site has the required skills to be there. While BuildUK recommend a change which ignores the primary purpose of a hard hat, ie protection, to try and make it useful for something else, we have a different angle – coming from the technology sector.
Our aim at KJL is to understand the primary purpose of a service or product and to expand its usefulness without increasing cost without good reason. In essence, the technology sector is an exercise in streamlining non-essential administration and improving the core functions of a business.
PROStruction, our new site management solution, already achieves most of the aims which have been outlined with the introduction of the new hat colours. In addition to ensuring all workers on site have the required skills and training to work competently, it also allows for instant checking of skills documentation and insurance details to protect the business (and potentially protect ongoing investment).
This is only one very small improvement introduced by PROStruction. To find out more about the revolutionary new system, please click here.