Construction in the North – a wealth of opportunities

The UK construction industry accounts for approximately 6% of the economy and has been a consistent source of growth over the last 50 years¹. Last month, Dr Claire Handby, a Director in Deloitte’s Real Estate Consulting team, gave a speech at a Chartered Institute of Building (Women in Property) event, and spoke about the value of construction, particularly in the North of England. The construction industry provides employment for over 2 million people in the UK, over half a million in the North of England, and has experienced a 4% growth since 2007².

In the speech Claire shared the many positives of the industry, highlighting some current risks too including how a potential loss of EU workers with adjustments to the immigration system could pull some of the Northern construction workforce towards London and the South of England, lured by the potential for higher salaries, another risk, perhaps more significant is recognising there’s a bulge in the amount of existing construction workers in the North, on the fringes of retirement leading to a declining talent pool which needs to be replenished to keep the sector moving forward, at pace.

Research from the CITB has indicated that the North of England requires more construction workers annually than any other region, needing around 5,500 new recruits per year to sustain demand within the industry³. The North presents a wealth of opportunities for construction workers to establish their own businesses – between 2015 and 2018 over 8,000 new construction businesses were set up, underpinning the entrepreneurial spirit of the North and the sustained strength of the industry.

For the construction industry in the North to fully flourish, there needs to be a change in perceptions too – a career in construction has traditionally been perceived relatively poorly, especially in terms of salary. However, in reality it’s a really rewarding, dynamic place to be, with the pay increase in the sector over the last 10 years larger than in any other, and the median graduate salary in the industry for those aged 21 – 30 comes second only to that of the manufacturing industry.

Unlocking the potential of the Northern Powerhouse

The CIOB highlighted two areas that can help construction industry practitioners continue to harness opportunities, particularly in the North – collecting better data to drive building quality and harnessing the potential benefits of collaborating to better effect across the currently disparate businesses that make up the construction sector.

The Northern Powerhouse continues to step up and demonstrate its capability in construction skills, boosted by its heritage in engineering and industry, from seizing opportunities to accelerate growth in off-site manufacturing to responding to the growing demand for bold, residential developments across the North of England. By focusing on innovation and excellence, improving perceptions and enhancing collaboration at all stages of the supply chain, the construction industry can increasingly maximise the value it adds to the UK economy, including growing export potential too. The North of England must continue to seize opportunities and work together more broadly across its already successful design, manufacturing and contracting specialists to maximise the collective benefits for the full reach of this important industry to be realised.

Deloitte Real Estate’s 2019 Regional Crane Survey further explores the link between construction and economic growth in a city, highlighting the relationship between development and prosperity. The report evidences the potential the construction industry has to offer in the North, and demonstrates the record-breaking level of construction across all sectors in the North of England.

Claire Handby – Director, Deloitte Real Estate

Claire is a Director in our Real Estate Consulting team, advising on Real Estate, Capital and Infrastructure Projects. Over two decades she has gained a range of leadership, consulting and management competence covering Portfolio, Programme, Project and Assurance Roles having worked for both public and private sector businesses. Claire has an increasing focus to help our clients continue to respond to their digital disruption opportunities and challenges within these sectors.

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Georgina Botterill – Assistant Director, Deloitte Real Estate

Georgina is an associate director in the Real Estate Consulting team with experience of providing strategic advice to both public and private sector clients facing Real Estate related business challenges. She is also a Qualified Chartered Surveyor.

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Alice Bak – Assistant Manager, Deloitte Real Estate

Alice is an assistant manager in the Real Estate Consulting team. She is a newly qualified Chartered Surveyor and have completed the Real Estate Graduate scheme.

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¹ Bank of England, 2019
² Office for National Statistics, 2019
³ Construction Industry Training Board, 2019