Innovation could help firms survive economic slowdown in the construction industry, say key BIBAs figures

Business leaders in Lancashire say that innovative practices, including implementing Net Zero improvements, could help construction firms survive the forecast recession, as output in the sector declines by 1.4%

Despite an initial post-Covid rally, the construction industry is once again facing significant pressures.

The Office of National Statistics (ONS) reported that monthly construction output fell by 1.4% in June, after seven consecutive months of consistent growth.

In July, the S&P Global/CIPS UK Construction Purchasing Managers’ Index decreased to 48.9, compared with 52.6 in June, dropping below 50 for the first time since January 2021, further reiterating that the industry is experiencing trading difficulties despite the elimination of lockdowns.

Current challenges are linked to continuing supply chain disruption, increased interest rates and high inflation.

Turner & Townsend has estimated that inflation in the infrastructure industry is set to rise by 8% by the end of 2022, and its forecast for 2023 has risen from a 4.5% increase to 5%, meaning that there is an enhanced pressure upon these businesses to obtain customers despite the price hikes.

Moore and Smalley, sponsors of the Construction Business of the Year award in this year’s Be Inspired Business Awards, the BIBAs, have previously stressed the importance of incorporating large-scale infrastructure projects and the introduction of big commercial developments by private and public sector clients as a means of safeguarding the county’s construction businesses.

But the introduction of innovative construction products and methods could help to ease pressures for individual companies and projects in the shorter term.

Intersys-Micronics, based in St Annes, is sponsoring the Innovative Business of the Year award in the BIBAs. In February, managing director Denys Smith-Hart pointed to how innovation had helped businesses survive the Covid pandemic, saying that they “need to now take this newfound willingness to experiment and explore, and build on it for the future” adding that further major shifts could be expected.

Environmental and energy improvements linked to Net Zero are areas where innovation could lead to cost reductions.

Babs Murphy, chief executive of the North and Western Lancashire Chamber of Commerce that organises the BIBAs, is on record as saying that “companies that can come up with clever ways to reduce their own energy and environmental footprint stand to save money, and that’s something that’s recently become even more pressing given the situation with rising energy prices” and that “there are clearly also opportunities to create new business models, innovative new technologies and improved services”.

Innovations already being pursued in construction include greater use of Artificial Intelligence (AI) and Machine Learning to improve workflows and deliver productivity gains, with the global consultancy Accenture claiming AI has the potential to increase industry profits by 71% by 2035. 3D printing, greater use of architectural timber and prefabricated construction are also areas where innovation is making a difference.

Finalists will learn if they’ve won in their categories at the upcoming BIBAs awards ceremony that takes place in the Tower Ballroom on Friday 16th September.

BIBAs Foundation
Innovation could help firms survive economic slowdown in the construction industry, say key BIBAs figures
Once again this has been a great year for the BIBAs