The construction supply chain’s ability to deliver large volumes of new development remains in uncharted waters, with client concerns growing as to how many projects will physically get delivered.
Forget about how we meet government targets of more than 240,000 homes a year.
The pressure points around resource are already under stress and current delivery levels stand closer to 120,000 homes a year.
This is further accentuated by the London market, where an unprecedented number of projects are being planned and designed but, critically, now are also being procured and physically constructed.
What is becoming increasingly evident is that the supply chain’s attitude to future work is hardening, with terms and pricing reflecting the buoyancy of the market.
The exact make-up of the consultant and contractor teams is also crucial, going beyond the collective corporate identities of the project team.
This busy market requires the right individuals, not just the right companies.
CVs are being scrutinised more than ever to demonstrate a strong personal residential track record – not just what the standard corporate brochure might indicate.
“Projects selected purely on price have led to either inappropriate resourcing or, in some more extreme instances, insolvency issues”
There are schemes being delivered at the moment where the wrong decisions have been made on team selection, which has impacted on cost, time and quality.
Projects selected purely on price have led to either inappropriate resourcing or, in some more extreme instances, insolvency issues.
Meanwhile there is the growing problem of whether, beyond price-driven selection, the supply chain has the physical capacity to deliver at any price.
So the race is on to secure the right expertise at all levels and in all disciplines.
There is a finite pool of quality resource in the construction market, and even less that is able to deliver high-intensity residential projects – especially at top specification levels.
The time lag involved in training more personnel to fill key roles is potentially a greater issue than pressure on materials supply, which is ultimately resolvable with a demand-led uplift in manufacturing production rates.
“I sense we are going through a particularly volatile period, potentially leading to continuity issues and inappropriate replacement of resource”
The dangers associated with job market volatility are increasing.
As the competition to gain access to the established pool of good quality resource intensifies, the likelihood of key people moving between different businesses and projects will increase.
Industry moves have always happened but I sense we are going through a particularly volatile period, potentially leading to continuity issues and inappropriate replacement of resource.
The development delivery risks associated with residential work have never been higher and there is a critical need for vigilance to ensure promises made when selecting supply partners are met.
All in all, the obvious need to increase new entrants into our industry is very real, as is the need for different approaches to delivering new homes.
But the real issue is what happens in the intervening period.
While we grapple with the industry’s image, the skills shortage we are now facing is in danger of creating a glass ceiling on the UK’s residential delivery capacity and damaging our ability to deliver major infrastructure and respond to any wider commercial property market recovery.
Mark Farmer is head of residential at EC Harris