Jim Roach, managing director of ARV Solutions, takes a look at whether party politics or internal politics will have the biggest impact on the offsite construction sector
Is party politics where we should place the most concern? With a general election looming, it seems opportune to write about politics affecting construction, and offsite construction in particular. But is it party politics that should cause the most worry?
Which level of politics will have the biggest impact on the offsite construction sector?
Government and Parliament, or internal issues within business? Party politics is undoubtedly a major factor in the industry's success, however with big money and investment increasingly coming into offsite, as well as increasing sophistication, I foresee a huge potential for disrupting politics, both external and internal becoming a significant issue.
The offsite construction sector has until recently been made up mainly of privately-owned SMEs, with a small number of larger long-established businesses. No business is free from politics, and we see that along with management issues, politics is often cited as a key reason for people leaving employers. But as the sector changes, will new issues add to those we already have?
Does big business mean bigger problems?
We now have major PLC companies investing in the sector, including international banking and insurance groups, overseas manufacturers, major housing developers and more. So, we now have new dimensions coming to play: big finance coming in with responsibility to outside parties, like shareholders, and sellers, looking to an exit with potential big pay-outs to protect.
We are seeing professionals from very different backgrounds now working closely together in unfamiliar relationships, towards challenging goals in rapidly growing and developing businesses. The level of understanding of each party's role and responsibilities is key to success, and can easily become a blocker to progress if not communicated and understood well. We have always seen challenges between construction professionals and manufacturers in offsite and an important key to success is getting this relationship right. And we now have relationships between even more diverse backgrounds to get aligned: for example, financiers don't automatically have the same agenda as manufacturers.
Add to this the more wide-ranging roles within a modern offsite business – just within manufacturing we now have more Process Engineers and Quality Managers with potential for conflicting ideas. More so for Designers who can't work in isolation: design has to be done in line with manufacturing and assembly (DfMA) and increasingly has to line up with major IT requirements to integrate with costings, automated machinery and ERP systems. Do you work with the best design software or the one that integrates best with your other systems? Who leads the way? Is it IT, Design or Manufacturing – and what about the investor or new owner's view? These issues bring more politics to the table, which can inevitably lead to both dismissals and resignations. As a recruitment business owner, it could be seen as tempting for us to relish this, as it could lead to more work for us. In reality, as a specialist committed to the sector, our success is closely linked to seeing our client businesses succeed, and for the sector overall to succeed. Also, it's hard to recruit for a business whose brand and reputation gets tarnished for losing staff.
Shall we deal with the Brexit bit here? No, I think best to leave that one out for today.
However, if the economy slows (or crashes?) as a result of the outcome (should that ever come) or even due to inaction, should we expect offsite to suffer? In past recessions, offsite take-up has slipped back as industry reverted to better understood traditional methods. Hopefully, the sector has reached a critical mass and momentum now to hold its own. Potentially, other factors could be the drivers for seeing further offsite growth even in a tough market. Skills shortages are already acute and only likely to worsen, the environmental factor favours offsite with reduced waste, and potential for higher standards. We have seen encouragement from Government driving for improved productivity.
Whoever forms our next Government will be making significant decisions affecting the UK construction sector. Housing has been an issue for many years, with prices outdoing inflation due to restricted building. Major infrastructure schemes are in the pipeline including HS2 and Heathrow – each representing huge opportunities for Modern Methods of Construction to add major benefits. Will they get the go-ahead? Offsite is relatively unpublicised in infrastructure schemes, though has quietly been developing a wide range of solutions from modularised plant to advanced precast sections. This area could develop hugely with significant investment and scheme go-aheads.
What can we do?