The UK construction industry has struggled with bankruptcies for years and now, as the UK faces a perfect storm of factors including inflation, interest rate increases, and the ongoing impact of Covid-19, reports are predicting more than 6,000 company bankruptcies in the sector in 2023.
Unfortunately, much of the focus is on offsite bankruptcies, which perpetuates the perception that offsite building is risky instead of recognizing that construction as a whole is fundamentally broken.
Following a recent article posted by Akerlof, the Insolvency Service reported in 2022 that the construction industry accounted for 19% of all company insolvencies in England and Wales, and of that 19%, less than 2.5% were offsite companies.
Statistically, modular providers have a lower chance of going under than many other parts of the market, with an average age of 16.1 years and only 21 companies going into administration in the past three years. By contrast, 84 times as many M&E businesses have failed in the same timeframe.
It’s clear that the industry as a whole is facing wider issues around policy, planning, and skills, yet this underscores the need for change, increased productivity, legislation change, and top-down contracting eradication.
Offsite has the potential to succeed
The potential in the offsite industry is crystal clear and there couldn’t be a better time to drive transformation, supported by new technology and the skills and expertise to bring exciting innovation.
However, without a genuine shift across the industry, all of this will remain nothing more than a pipedream. A change in behavior and culture is needed throughout the sector, with a focus on long-term supply chain partnerships, value-driven outcomes, and risk management.
It’s time to educate and inspire the workforce, capturing the imaginations of young people, and encouraging the understanding of careers in construction beyond bricks and mortar.
The UK’s construction industry is critical not only for economic growth but also solving the housing crisis, which can only be achieved through a well-supported and thriving construction industry.
CLICK HERE to read the entire PBC Today article
CLICK HERE TO READ AUGUST’S ISSUE
Gary Fleisher, the Modcoach, author
Contact the Modcoach
