Construction nearly double size of official figures

Aaron Morby 1 month ago
Share

The construction industry is nearly double the scale and importance to the UK economy than recorded in official figures.

Construction is the most successful industry for delivering upward social mobility within the UK workforce
Construction is the most successful industry for delivering upward social mobility within the UK workforce

This means Government policymakers are working on the basis of a 6% contribution to the whole economy when the industry’s real input is more than 10%.

The discrepancy stems from Government number crunchers’ definitions of construction. This excludes inputs from architects, engineers, and quantity surveyors as well as product manufacturers, builders’ merchants and plant hirers.

When these are added to the mix, the industry’s contribution swells above that of manufacturing.

Serious shortcomings in assessing the importance of construction are revealed in today’s  Real Face of Construction 2020 report  from the Chartered Institute of Building.

It also eveals construction is the most effective of all industries at improving social mobility within the UK workforce. This is measured by the % of managers now working in construction whose main-earning parent was previously in an occupation classified as skilled trades.

 

Defined by the economic value it adds (gross value added) construction’s contribution to the UK economy in 2018 amounted to about £116bn, which equated to 6.1% of total gross domestic product.

Economic commentator and report author Brian Green said this figure rises to above 10%, compared to manufacturing’s 9.6%, when the full scope of activities is recorded.

Construction contributions from manufacturing, mining and energy add £60bn to GDP, professional services more than £25bn, finance and real estate around £8bn and distribution another £5bn.

Green said: “This matters greatly. If policy makers and experts do not have access to the full picture then bad decisions and, in turn, bad policy based on incomplete data is likely to be made.”

The CIOB is calling on the Office for National Statistics to produce satellite accounts that pull together the key elements that make up the broader construction picture.

Caroline Gumble, chief executive of the CIOB, said: Our purpose for this report is to help educate policymakers about the true value of the built environment and the need to work in closer partnership with the industry to realise its full potential, particularly at a regional level where it can rebalance local economies and offer people a quality career unlike many others.”

 

CIOB recommendations

  1. Published data should embrace all the aspects of the design and construction process, not just the assembly on site. Satellite accounts could better describe how the wider construction industry is performing. This would include all the contractors, consultants and dedicated suppliers to the industry, whether they are classified as in the construction sector, the service sector or manufacturing.
  2. Measure industry performance using post-occupancy evaluations. This would capture lessons from both good and bad outcomes that are not being routinely fed back into the industry to promote innovation and overall improvement in performance.
  3. Conduct further research into the value generated by construction and the built environment, particularly where this is not captured in the market.
  4. Both local and central government should seek to promote and support regional clusters of construction-related businesses to act as hubs of excellence and innovation. Incentives, such as low rents or low rates could encourage a diverse range of businesses such as engineers, architects, surveyors, contractors, specialists and product manufacturers.

The CIOB’s Real Face of Construction 2020 report can be accessed by clicking here.

Latest news

Unsafe cladding replacement work a priority to continue

Latest government coronavirus construction policy update
18 hours ago

Police threaten to fine contractors on way to work

WIllmott Dixon asks subcontractors and staff to carry letters to avoid fines
2 days ago

Opinion: Official line needed now on site closures

Boris Johnson needs to spell out now exactly what construction work can continue
2 days ago

Groundworks and civils firms start mass layoffs

More than a thousand self-employed workers axed in the Midlands alone
2 days ago

Redrow loses fight to keep sites open as supplies hit

House builder pledges to re-open sites when normality returns to the supply chain
2 days ago

Balfour Beatty board follows Kier’s move to take 20% pay cut

Chief executive Leo Quinn says Balfour is facing crisis on a strong financial footing
2 days ago

Self-employed to get 80% of average monthly profit

Support scheme only open to people with a trading profit of up to £50,000
3 days ago

Coronavirus update for construction: Friday 27

The latest advice and information from industry trade bodies
2 days ago

CITB suspends training levy for three months

Full 2020 levy payment to be collected in August
3 days ago

Henry Construction Projects tops £300m turnover

London contractor trebles in size over three years
2 days ago

£100m Manchester CIS tower revamp approved

Landmark 31-storey tower refit approved as facade reaches end of design life
2 days ago

Willmott Dixon: Why we are keeping sites open

Contractor promises to keep workers safe and look after supply chain
3 days ago

Carey bosses: “We won’t risk health of our people”

"We will never ask our people to put their health at risk in the name of work"
3 days ago

“Turn up on site or else” – majors turn screw on subcontractors

Specialists threatened with LAD claims as Tier Ones "bully" supply chain
3 days ago

Coronavirus crisis brings out best and worst of construction

Most contractors are doing their best in a crisis - while others are letting the industry down
3 days ago

BAM Contruct pauses work on all sites

BAM Nuttall civils sites still open, as building arm pauses for safety procedure review
4 days ago

Highways England orders majors to pay supply chain

Payments speeded up to Tier Ones who are told not to hoard cash
4 days ago

Coronavirus update for construction: Thursday 26

The latest advice and information from industry trade bodies
3 days ago

JCB extends factory shutdown until May

JCB directors forgo salaries in C-19 crisis
3 days ago

McAlpine latest contractor to close its sites

Contracts included refurbishment of Buckingham Palace
4 days ago

Costain Chief Operating Officer joins Keltbray

Darren James joins specialist after 30 years at Costain
4 days ago

Keep two metres apart and you can carry on building

Government says sites can still operate as long as social distancing observed
4 days ago

Morgan Sindall cancels dividend

Contractor supplements £132m daily net cash with draw down of £180m bank facility
4 days ago

Big names start to shut sites

Mace and Multiplex shut all sites as ISG closes jobs which "cannot meet an enhanced risk profile test"
5 days ago

Michelmersh suspends brick deliveries

Brickmaker suspends production as industry shutdown widens
4 days ago

Coronavirus update for construction: Wednesday 25

The latest advice and information from industry trade bodies
4 days ago

Crossrail sites ordered to shut down

TfL tells contractors to bring sites to a safe stop as soon as possible
5 days ago

Murphy sole UK firm chasing £1.7bn Stonehenge tunnel

Trio shortlisted for A303 Amesbury to Berwick Down scheme
4 days ago

Race starts for £2.1bn Constructing West Midlands 2 deal

Balfour, Bouygues and Willmott Dixon in fight to retain places
4 days ago

Runaway cement wagon breaks out of Hanson works

Investigation launched after wagon careers for over 1km across two level crossings
4 days ago

Contractor services