Enterprise Ireland’s experienced market advisors (MAs) provide expert guidance to Irish businesses expanding into the UK market and engaging with their British clients. In the second of our series, we catch up with John Hunt, Senior UK Market Advisor for the construction sector.
Hi John, hope you’re well? Let’s start at the top – how do you work with the UK construction sector?
“Enterprise Ireland supports the most innovative and capable Irish companies to grow in international markets. Our UK offices in London and Manchester specifically match Ireland’s most innovative products and services to the evolving needs of UK partners and customers. We work with UK based organisations, offering a single point of access to a portfolio of over 300 companies operating across the UK construction sector.”
That must keep you busy! What are the main trends you see in your industry?
“Unlike many other sectors, construction is at an early stage of industrialisation. That makes it a very exciting industry to be in.
“Across the globe, each project tends to be bespoke which leaves little opportunity for standardisation or repeatable efficiencies. But digital tools and processes are now connecting design, manufacture and assembly, and it’s in that niche that we are beginning to see the potential for a productivity transformation.
“Within Europe, the UK and Ireland are at the forefront of this transformation, a leading position that’s important to sustain.”
That does sound exciting – can you tell us about what you’re working on at the moment?
“For the past 5 years we have been investing in new technology companies, supporting mature companies in their digital transformations, accelerating collaboration and sharing best practice between international markets.
Currently, my colleagues and I are working on a Digital Showcase event, a Pecha Kucha style presentation of our most successful ‘digital disruptors’ on the Keynote stage of London’s Digital Construction Week.”
And what companies are you supporting right now?
“There is a lot of emphasis on the companies that support increased productivity, in particular off-site manufacturing and those companies that can integrate into digital supply chains or offer digital tools.
“I don’t want to pick any favourites! But at the moment, I’m working with about 50 companies of all sizes across manufacturing, services and technology.”
Ok, that’s fair! What does a typical day look like for you?
“I’m based in our London Office on Shaftesbury Avenue. In my day-to-day, I support a number of Construction Advisors within Enterprise Ireland’s Global team and work closely with the sector team based out of Dublin. Typically, we’ll have a Skype Conference call at one end of the day where we coordinate the market plans for our clients working across multiple countries.
The majority of our clients have offices in the UK, so I’m often travelling between, or attending, meetings or sector specific events. We organise a significant number of events during the year, from tailored itineraries for overseas companies discovering new partners in Ireland, knowledge events, trade fairs and a mix of network receptions and dinners. At any one time we’ll be planning, executing or following up a sector event.
Given the large number of our client companies that are based in the UK, their health and growth is closely aligned to the UK construction market’s success. I work with a number of collaborative industry initiatives and support different research projects to progress the market’s evolution.”
What do you see as the main challenges for your industry in the future?
“The capacity of the industry to successfully embrace digital technology and new process will present the opportunity to disrupt while conversely, a successful transition will decrease the likelihood of our markets being disrupted by entrants from other sectors.
“Key challenges to digital transition include the existing culture, the fragmented nature of the industry, historically low levels of profitability, high levels of market uncertainty and regressive approaches to public and private procurement. The solution will most likely incorporate bold collaborative solutions that overcome inertia and resistance to change.”
With Building Information Modelling technology offering significant reductions in project costs and delivery times, Enterprise Ireland, the national export agency, is supporting its adoption.
The construction industry has never been slow to embrace new technologies. Sophisticated computer-aided design systems have long been a feature of Irish architectural and engineering practices, while many building components are now precision-made in computer-aided manufacturing facilities.
The latest wave of virtual and augmented reality technologies is enabling clients to take virtual “walks” through buildings, long before a shovel has touched soil.
At the same time, contractors have invested heavily in advanced systems to manage all aspects of projects – from resource planning through cost control and beyond.
However, the various pieces of software and systems employed on projects do not necessarily communicate or connect with one another in a coherent fashion. Each element of the project – design, construction, supplies – may be operating efficiently, but the project may be suboptimal in key respects such as cost and schedule.
What exactly is BIM?
That is where Building Information Modelling (BIM) technology comes in. Put simply, BIM is a digital representation of all aspects and characteristics of a building, both physical and functional. It is a shared pool of knowledge which all stakeholders can utilise from the moment design of the building commences right through the life-cycle – from construction through completion, ongoing maintenance and management, eventually to the point where it is demolished.
It is wrongly assumed in some quarters that BIM is essentially a digital 3D model of a building but it is far more than that. It includes the original specifications for every block and board, fixture and fitting employed in the building, and goes further by including data on time, cost and operation – sometimes referred to as the fourth, fifth and sixth dimensions of a building.
Advantages of BIM
This makes BIM an enormously powerful decision support and conflict avoidance tool. At a very basic level, cost or time overruns in even quite minor areas of the project are notified before they can become problems, thus allowing swift remedial action to be taken.
The key aspect of BIM is the fact that it is a shared resource. Everyone who has to interact with a building at any stage has access to it. The subcontractors who arrive on site months after construction has begun have access to fully updated information about the project and their role in delivering it. Indeed, they can utilise the model long before they go on-site to clear up any potential problems or difficulties before they arise.
The same applies to the facilities manager who takes charge of the building following completion. Even the most complex maintenance and repair tasks are made far simpler as a result of having all data relating to building services and their location to hand in a single resource.
Also of key importance is the fact that the BIM is the property of all stakeholders. This means that everyone on the project team is responsible for updating it. Information is therefore up to date and spans all aspect of the project thereby greatly reducing the margin for error and the costs associated with making good discrepancies.
In this context, it is little wonder that Ireland’s National BIM Council (NBC) has estimated that the reduction of wasteful practices in construction as a result of BIM will result in costs being brought down by as much as 20%. The council also asserts that construction exports could be increased by 20% through enhanced productivity and knowledge leadership, which will enable Irish firms to drive and support the advancement of digital construction across overseas markets. The NBC also believes that project delivery time schedules will be reduced by 20%.
There will also be a societal gain. The information gathered through BIM will mean that every construction project will contribute valuable digital data to smart communities, smart cities and smart economy, which in turn will position Ireland at the forefront of the digital transformation across Europe and globally.
The fallout from the 2008 economic crisis, which saw many people leave the construction industry, left Europe as a whole struggling with skills shortages, according to the Association of European Experts in Building and Construction (AEEBC) – and the recovery felt in recent years has made these effects more sharply felt.
“Now there is a recovery, mainly in Northern Europe, shortages have gotten worse,” says Martin Russell-Croucher, General Manager for AEEBC, and a chartered surveyor and chartered environmentalist. “For some countries, the collapse of the construction industry in countries like Italy and particularly Spain, has freed up professionals to fill some of the spaces in Northern Europe.”
“While trades have moved to ‘hot spots’ such as Germany, there are problems with language and skill levels,” he says. “There are also issues with this movement of tradespeople as they tend to be cheaper to employ than locals and this can undermine the home market if locally trained people can’t get jobs because they are too expensive. This has been happening in Denmark.”
“There have been skill shortages for some time, certainly two years or more. The shortages tend to be localised, for example, London and the southeast of England where most of the construction has been taking place. The shortages are both trades and professions.”
All European countries have a dearth of labour, partly due to more people retiring than are coming into the industry and also the large numbers that left the following the crisis in 2008, according to Mr Russell-Croucher.
“France seems least affected as it continues to attract people into the sector,” he says but adds that the phenomenon is not limited to France: “Germany is now booming, and sucking in the additional people required from other countries.
Mr Russell-Croucher continues “All European countries are facing problems of upskilling existing people in building information modelling (BIM) to meet future standards.”
The Home Builders Federation in the UK recently carried out research, which illustrated the importance of EU workers in building the country’s homes, with one in five workers hailing from outside of the U.K. Mr. Russell-Croucher says that “Post-Brexit access to skilled labour is essential if the industry is to hit government housing targets.”
However, the general situation is not at crisis level as far as the AEEBC is concerned. “Governments are trying to improve the number of their own citizens coming into the industry but it takes time to train people and construction is not a popular choice of career. Most, like Germany and the UK have relied on migrant workers but this is becoming an issue for the UK because of the current uncertainty,” says Mr Russell-Croucher.
“In the UK, the government has been supporting apprenticeships but changes to the funding methodology are causing problems. All countries are promoting the construction sector jobs but of course this is not a quick fix as it takes a couple of years to train somebody to a minimum level in most trades.”
As recruiters pitch for the same small pool of people, attracting skilled candidates has become highly competitive and aggressive.
“Apprenticeships are fine up to a point but for tradespeople, it means using trained people for training and that means they are less efficient and lose money, so they are reluctant to take on that role if they are self-employed,” says Mr Russell-Croucher.
“I’m afraid the old system of firms directly employing their own trades who trained up their replacements has vanished, not to return because it was no longer competitive.”
Tough working environment
Making the industry more enticing for women has also been mooted as a potential method of attracting candidates.
“Getting more women into the industry would be great but construction is not always an attractive career. Booms and busts and a tough working environment with little job security makes it a hard sell to anybody,” Mr Russell-Croucher says.
Making digital tools part of the construction process could lead to a more transparent and accountable construction sector with better allocation of human resources and increased productivity, according to Anastasios Koutsogiannis of GenieBelt, a real-time project management software and mobile app that provides instant communication from site to office.
Money speaks all languages
“The best recruiter is money,” states Mr Russell-Croucher. “If a job pays well, people will put up with the problems. A few years ago it was announced that electricians were being paid very well – I think it was £60,000 or £70,000 a year – on Heathrow airport Terminal 5. Suddenly there was a surge in people applying to be electricians.”
Contact John Hunt to discuss how Enterprise Ireland can help you source strong Construction partners.
John Hunt, Senior Market Advisor for Construction at Enterprise Ireland, describes how strong partnerships will support the sector through challenges in the international landscape.
Two recent government announcements have major implications for the High-tech Construction sector in the UK.
Construction landed one of the latest rounds of sector deals worth up to £250m, as part of the government’s Industrial Strategy unveiled earlier this week. The Budget gave a massive boost to offsite construction, which will be favoured for public infrastructure schemes from 2019. Commitments to housebuilding and the announcement of a £34m investment in teaching construction skills, with a further £30m invested in digital courses using artificial intelligence, were all well received.
While the drive to improve offsite, digital and construction skills is good news for the industry, labour shortages for infrastructure and housing remain a major concern ahead of Brexit. The UK will require 400,000 new construction workers every year until 2021 (Source: Arcadis, 2017) to deliver all planned projects in the National Infrastructure Delivery Plan (NIDP), even before Brexit-related immigration issues are taken into account. It will not be possible to fill these roles simply by training more people or through the increased use of technology and automation, at least in the short term. Collaboration with strong partners will be key.
Strong digital capabilities from an established partner
With trade in Irish products and services to the UK increasing by 68% over the past five years, to €1.29bn in 2016, Irish companies are uniquely positioned to support the requirements the UK construction sector.
Building on strong domestic capacity, Ireland’s construction sector produces a diverse array of companies with several hundred organisations already trading in the UK – providing a vital skills injection. A recent Enterprise Ireland Digital Transition Survey showed that Ireland’s digital capabilities are deepening, with 76% of AEC organisations confident in BIM knowledge and skills.
Irish capability in Construction at work
A number of Irish companies already provide innovative construction solutions to the UK market. John Sisk & Son was recently appointed by Quintain to carry out the construction of 745 build-to-rent apartments on its Canada Court scheme at Wembley. Quintain chose Sisk as a partner due to a “shared focus on providing the most efficient design for the product they were creating as well as embracing BIM”. Sisk has also been awarded the development of a large data centre campus by a multinational client, which was designated as a pilot scheme project of good BIM practice for any future international data centre projects.
Irish off-site construction company Shay Murtagh has completed a contract for precast tunnel linings on the Crossrail project and is currently supplying the Mersey Gateway project as well as a number of National Rail improvement projects.
Despite recent economic uncertainty, Ireland continues to be a first-point partner for the UK. Enterprise Ireland is an Irish government agency that helps companies to scale internationally through tailored professional advice, funding, skills development, sector expertise and access to connected networks. Enterprise Ireland client companies export over €550m a month to the UK. Trade between the UK and Ireland directly supports 400,000 jobs, approximately half of which are in the UK. With innovation and creativity being at the heart of Ireland’s economy and society, Enterprise Ireland is encouraging more UK construction companies to consider Ireland as a partner that can help grow their business.
Contact John Hunt to discuss how Enterprise Ireland can help you source strong Construction partners.