黑洞社区

The future of the construction industry is here already. The only problem is that you have to go half way around the world to see it. While off-site construction has never really taken off in the UK, in Japan, what we still quaintly call modern methods are used to build 150,000 homes a year (see box, below).

The Japanese enthusiasm for factory-built housing is partly rooted in the same kind of labour market shortages that bedevil the UK industry. Japan鈥檚 ageing workforce has led to a severe labour shortage in the construction and civil engineering industry but it is responding to the crisis by investing heavily in modern methods of construction (MMC) and robotics.

In the UK, Mark Farmer, who recently left Arcadis to set up his own construction consultancy, Cast, has just been asked by the government to lead a review of construction labour force skills (see box, below ). The former Arcadis development director did the spadework in a report that he co-authored for his old firm last year into the demographic challenges facing the sector. This pointed out that the construction industry鈥檚 productivity has barely increased in the past 20 years. As such, while many other industries have invested in labour-saving plant and technology, construction depends as heavily on scarce labour as it did in the early 1990s.

The report estimated that the industry requires a million extra workers to cope with looming retirements and the fresh labour demands likely to be generated by growth. The problem, the study warned, is that the pool of unemployed construction workers is nearly exhausted, at 3.4% of the industry鈥檚 total labour force. Given the industry鈥檚 historically lamentable record in attracting school leavers and graduates, the authors concluded that it will not be sufficient to rely on attracting new entrants into the industry or even workers from overseas. Stewart Dalgarno, director of product development at contractor Stewart Milne, agrees: 鈥淵ou are not going to be able to rely on a heap of people coming from Poland to solve the problem this time round. We need to find a game changer if we want to deliver on productivity.鈥�

The answer, Farmer鈥檚 report concluded, wasthat the industry needs to do things differently by fully embracing the greater efficiencies technology can deliver. Chris Jones, director of learning and development at Bam, agrees: 鈥淭hey [modern methods of construction technologies] have a role to play in increasing productivity by reducing the need for so much labour on site.鈥�

So besides looking at the well-worn issues of how to attract new entrants into the industry, Farmer鈥檚 review will be looking at how construction can become less labour-intensive. The question is whether the industry can be reformed quickly enough and fundamentally enough that a house, an office, or a bridge can be built using far less labour than is needed now. Will innovations such as MMC, on-site automation and robotics really make enough of a difference to the demand for skills, or is UK construction growth doomed to languish due to the shortage of skilled labour available to meet demand?

Technology to the rescue?

In Japan, Toho Holdings Co鈥檚 楼10bn (拢58m) distribution centre for its drugs wholesaling operation, which became fully operational in January 2014, employs about 130 workers, roughly half the number at another one of similar size. Productivity per worker is 77% higher, with robots handling 65% of item-picking, the firm says. According to Hajime Shoji, the head of the Asia-Pacific technology practice at Boston Consulting Group, 鈥済rowth potential is huge鈥�. By 2025, robots could shave 25% off factory labour costs in Japan, he says.

The Japanese government recently launched a five-year push to deepen the use of intelligent machines in manufacturing, supply chains, construction and health care, expanding the robotics markets from 楼660bn (拢3.9bn) to 楼2.4tn (拢13.9bn) by 2020.

Steven Hale, managing director of Crofton Design, believes that the UK construction industry is on the verge of the same kind of technological revolution that the steam engine ushered in across industry 200 years ago. 鈥淚f they can build a self-driving car that will be on the road in the next 10 years, an automatic bricklayer or plasterer is highly likely,鈥� he says.

Robot bricklayers have of course already beendeveloped overseas. The Swiss prototype, the In-Situ Fabricator, can build a house in two days, according to its inventors. However, even they admit that it will probably be a decade before its use is widespread on building sites. So this kind of techno-fix, while undoubtedly enticing, won鈥檛 be an answer to the UK鈥檚 immediate housing challenge.

But while robot site workers may still be more science fiction than commercial reality, off-site manufacture of building components is a much more mature technology. And Chris Brown, chief executive of regeneration developer Igloo, says the off-site sector is on the brink of an investment 鈥渕ini-boom鈥�.

Laing O鈥橰ourke is putting together plans for an advanced manufacturing facility for commercial projects. Up in Scotland, meanwhile, the contractor CCG has created a 130,000ft² facility with the capacity to manufacture 3,000 buildings a year. And even housebuilders, which have traditionally been wary about investing in MMC, are getting in on the act. Persimmon has retained the off-site facility in Birmingham that it bought as part of its acquisition of Westbury in 2006. The volume builder uses the factory on the outskirts of Birmingham to build the vast majority of the units that it produces for housing associations. And both Barratt and Crest Nicholson are working alongside Stewart Milne on a project, funded by Innovate UK and the Scottish government, to consider how the building process can be further industrialised. A figure from the Arcadis report claims that use of prefab timber frame cuts labour demand by 25%.

Greater use of factory housing could also pull new sources of labour into the industry, meaning less pressure on the same pools of scarce skilled labour, says Bam鈥檚 Jones: 鈥淚f you are building a building in London, you can take the manufacture of the cladding panels up to Redcar or wherever you have the labour to do that.鈥�

Brown adds that women might be more tempted to work in factories than on male-dominated building sites. 鈥淚t has proven extraordinarily difficult to attract 50% of the labour force into building houses, not least because of the intense misogyny of the housebuilding industry. 黑洞社区 homes in a factory would have a different culture and would appeal to a wider range of the labour force.鈥�

However housebuilders remain sceptical about MMC鈥檚 game changing potential. A Home Builders Federation spokesperson says: 鈥淭he industry does change and adapt and is continually looking for ways to improve but like all technologies you have to get it to the pointwhere it鈥檚 100% right.鈥�

MMC sceptics are able to seize on problems such as those which have beset the troubled Richard Rogers-designed 拢60,000 competition development at Milton Keynes, where water seeped through cladding panels and windows.Brown counters that traditional construction is just as bedevilled by shoddy work: 鈥淚 could give you 100 traditional construction problems for every MMC problem.鈥�

No silver bullet

But even if clients can be won over, moving to off-site construction won鈥檛 necessarily remove the need for traditional craft skills.

Richard Claxton, chairman of Bromley-based consultant Pellings, says many developments will still use a mix of traditional and modern methods. 鈥淵ou are still hampered by the supply chain of traditional construction.鈥�

And there will be an inevitable time lag even if the industry moves to a greater off-site footing, says Jones: 鈥淚t takes a while for these techniques to be accepted and built into the design.鈥� Pointing out that today鈥檚 construction projects were often being designed four or five years ago on the basis that they would be built using traditional methods, he adds: 鈥淵ou need to get through that lag effect in the medium term.鈥�

Sarah McMonagle, head of external affairs at the Federation of Master Builders, agrees that modern methods won鈥檛 be a silver bullet for meeting short-term housing needs: 鈥淚t鈥檚 not going to solve the skills crisis overnight.鈥�

This means, says the Home Builders Federation spokesperson, that the industry is right to concentrate on boosting training and apprenticeships. 鈥淭he focus has to be on recruiting more people to build the houses as we are building them today. We can鈥檛 meet the current skills shortage with future technology.鈥�

A shift in the business model

However, training and apprenticeships may prove to be inadequate to the task, suggests Farmer鈥檚 report for Arcadis. This suggested that the construction labour skills shortage is so endemic that it requires nothing less than a fundamental shift in the housebuilding industry鈥檚 business model.

Currently, much housebuilding is done on a 鈥渂uild one, sell one鈥� model. By using traditional techniques to build individual houses, housebuilders can turn the development tap on and off relatively easily. By contrast, pre-manufactured components are inherently less flexible because once they are ordered and cut, they generally have to be used for the same project.

Igloo鈥檚 Brown says: 鈥淚t makes virtually no commercial sense for the volume housebuilders with their existing business model to make use of modern methods.

鈥淲ith traditional methods, it is also easier to make design tweaks late in the day, says Pellings鈥� Claxton: 鈥淚t鈥檚 quicker on site but you have to set the design a lot earlier: you can鈥檛 fiddle around until the last minute as you can with brick and block work.鈥�

In addition, off-site manufacturing facilities rely on a regular pipeline of work, Brown explains: 鈥淔actories are a bit like running an airline: you need to keep them full and you can鈥檛 readily turn them on and off.鈥�

These constraints led Farmer to conclude in his Arcadis report that housebuilding must become less wedded to the boom and bust cycles of the 鈥渇or sale鈥� market.

Fostering a more diverse supply, such as new build private rented homes and custom built dwellings as well as affordable housing, would promote a more consistent flow of the big orders that could keep the housing factory assembly lines full.

Crofton鈥檚 Hale believes this approach makes sense. 鈥淭he problem with boom and bust is that it feeds into the industry鈥檚 image problem and makes it harder to recruit new entrants.鈥�

However, Farmer鈥檚 analysis runs up against the government鈥檚 policy to boost home ownership by shifting subsidies from social housing to supporting first-time buyers.

Richard Threlfall, head of infrastructure, building and construction at KPMG, says on this issue Farmer is right. 鈥淭he government is obsessed with home ownership. We ought to be focused on good quality housing full stop regardless of getting hung up on the underlying ownership.鈥�

If he sticks to his guns, Farmer鈥檚 conclusions could provide some uncomfortable reading for ministers.