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New horizon for Birmingham construction sector
Despite the difficulties facing the construction industry, we must not forget that the industry still plays a massive role in both the Birmingham and wider UK economy. As one of the biggest sectors in the Midlands economy, we need to continue to ensure that construction projects are delivered on time, on budget and to the highest possible standards that exceed clientsﾒ expectations.
The industry has undergone a massive period of growth and restructure since Sir John Egan launched the 'Rethinking Construction' report in 1998. In this seminal report, that has had a profound impact on the industry, Egan called for an improvement in efficiency; higher margins for contractors; better value for money for clients; and improved health and safety through off-site construction.
Many of these calls for improvement have been met. Construction projects are taking 40 per cent less time, profit margins have gone up from six to ten per cent and 78 per cent of projects are completed without any accidents occurring. However, despite these impressive returns, we must not fall into the trap of becoming complacent.
Top industry professionals realise that there is more that needs to be done to fully modernise the construction industry. In a recent survey of 200 leading industry managers, over a quarter commented that not enough progress has been made since Egan's report was published ten years ago. This open and honest assessment of the construction industry should be taken as a positive. By acknowledging that there is room for improvement, the industry is in an ideal position to move forward.
There are now many new challenges which the industry is facing and we have to respond to them accordingly. The investigations by the Office of Fair Trade (OFT), the construction watchdog, into 112 companies accused of 'bid rigging' has done nothing to improve the image of the construction industry. Similarly, the impact of the credit crunch on the housing market, and its subsequent reverberation into all sectors of the construction industry, has had a dramatic consequence for small and medium sized contractors.
Although these are major reasons to be cautious, the industry must avoid being downbeat about the immediate prospects it faces. Despite the slowdown in the economy there are still some major construction programmes planned for Birmingham including the regeneration schemes at Brindleyplace and The Mailbox. An ongoing regeneration and renewal programme in the South West of Birmingham city centre will also attract outside investment and improve facilities for the local community, making a significant contribution towards enhancing the local economy.
Ocon Construction is a contractor that is involved in several major regeneration projects and is successfully weathering the current economic storm. One of the key projects the company has delivered in Birmingham was the construction of a £22.5m 604-bedroom student accommodation apartment located on Bristol Road. This project utilised off-site construction methods by using Corus Bi-Steel's rapid-erect modular building core system, which was erected in four stages. As a result the project was completed six weeks ahead of schedule.
In order to deliver on time and on budget contractors must adopt an ethical approach towards business practice and the construction process. This has been the basis for Ocon to create a proactive working culture and build trusted and reliable project teams. It is becoming increasingly important for contractors to develop a long-standing relationship with the supply chain, and best practice indicates that sub-contractors should be kept informed of construction developments from day one to completion.
This effective communication channel has numerous benefits. For instance, as the credit crunch bites, contractors can be assured that they have a well-structured project team in place that is capable of delivering high-quality results in hard times. Having this sort of working infrastructure in place will also make it easier to deliver what the client wants in a professional manner.
The effects of the economic slowdown on the construction industry represents a timely opportunity for the industry to assess itself and look at ways for improvement in the future. As a result, this experience will ultimately be of benefit for regeneration projects in Birmingham.
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