Building Tensions

The construction industry in the UK is facing several underlying tensions currently, not only due to economic instability, but social, regulatory and environmental uncertainty, too.

These factors are understandably causing a period of unrest for the sector, leaving those within it uncertain about the trajectory of their trade, and whether they will be next in the long line of disputes and financial woes. Whilst issues vary, there are some key trends I have been noticing reappearing day-to-day.

The labour shortage

One of the most prominent examples has come to light with the advent of Brexit. There has been a loss of labour from EU citizens, and combined with the ageing workforce, contractors are having difficulty employing skilled workers. At the same time, there is a huge demand for new homes and the upgrade of the country’s infrastructure, which obviously has become a struggle to fulfil. However, there is simply no quick fix to this problem.

Whilst the Government has announced plans to invest £600 million over the next four years to train the next generation of engineers, brickies, sparkies and chippies, it won’t be until 2029 until we start reaping the benefits – leaving the sector in limbo for at least another few years.

Sustainability

On the sustainability side, the push for net-zero carbon and sustainable buildings challenges the traditional methods of construction; resulting in costs misaligning with financial savings goals that most developers are keen to achieve this year.

However, there is a light at the end of the tunnel. Despite adoption of green technologies not moving as fast as some would like, the goal to create environmentally friendly buildings is creating growth opportunities for those who are embracing change, offering some future reassurance to struggling developers.

Regulatory requirements

There is no getting away from the growing and complex building regulations and planning laws which impact most developments. It can take months before the shovels and boots hit the ground, and the upfront costs are increasing.

Adding extended periods of time to projects is a real financial burden, and given it is imperative these processes are followed to the letter, cutting corners in the hopes to cut costs is not an option. As a result, some simply can’t survive.

Profit margins versus world events

The construction industry has been impacted by a number of shocks over the last few years, COVID-19, Brexit, the war in Ukraine, and now trade tariffs. The supply chain, which we used to take for granted, is far from secure. All these events have caused delays to projects, increased costs, lowered profit margins, and insolvencies. Developers have been known to stop paying their contractors as projects near completion and then launching multiple adjudications based on unmeritorious claims, with the aim of pushing contractors in liquidation. The industry is crying out for collaborative working, and slowly but surely this is gaining traction.

Costs pressures versus quality and safety

This has always been a tension within the construction industry. Whether the project is in the public or private domain, there is always a push for cost savings. The impact of this is now well and truly out in the open. In a post-Grenfell world, property owners are investigating the performance of their buildings and the rise in legal disputes over defects will keep many construction lawyers busy until their retirement. We have already seen the collapse of an insurance company and the odds are high that numerous construction companies defending these claims will follow suit. It doesn’t take a crystal ball to work out how this will end.

This article appeared first in Construction UK Magazine on 5 June 2025.