UK construction industry optimistic for growth but hampered by lack of data talent

Autodesk says that the utilisation of data will be pivotal in realising the growth potential and driving the economic recovery of the industry (Photo: AdobeStock)

However, the use of data is being hampered by a lack of access to skilled staff, with 26% of UK construction leaders citing this as a key concern preventing integrating data-driven insights into business processes.

Using Deloitte’s Data Capabilities Assessment Tool (DCA)* and a new survey of 609 construction leaders from the UK, Ireland, France, Germany and the Netherlands, Autodesk has revealed new insights into the outlook for the industry and the state of its data-driven decision making.

A down year turns to optimism for the future

The survey found that average profit growth for the industry in Europe was 12.8% in FY23, but in the UK specifically it shrunk by 3.6%, the worst performance of the five countries analysed. 23% of UK construction leaders cited the cost of raw materials as the biggest challenge affecting their business, with higher labour costs placing second.

However, there is positivity for the future, and according to the most recent S&P Global/Cips UK purchasing managers’ index, the UK construction industry returned to growth for the first time in seven months. Echoing this, 56% of UK construction leaders feel optimistic about the near-term financial performance of the industry. On average, those surveyed expect 3.4% profit growth over the next five years.

Data leadership not matched by processes

Autodesk says that the utilisation of data will be pivotal in realising the growth potential and driving the economic recovery of the industry.

The Building Safety Act, which was passed into law almost two years ago, places the responsibility on UK construction businesses to collect, store, and share data, and create a seamless flow of information for each project.

This data will form a “golden thread” of information for each project, enabling businesses to better manage their operations and mitigate risks.

According to Deloitte’s DCA tool, the UK has the highest share of data leaders (18%) of the five European countries but also the third highest share of beginners (23%).

“A high proportion of UK construction firms act as data leaders,” said David Rumbens, partner at Deloitte Access Economics.

“However, uncertain market conditions have underlined the importance of strong data capabilities to mitigate macroeconomic trends.”

It is estimated that 36% of UK construction businesses currently capture progress data but do not analyse it, which is partly due to a lack of integration. Around 43% of leaders acknowledged that their organisation was storing data on too many different platforms, while 37% agreed that they were having difficulty integrating data across various platforms.

Developing skills is paramount

With 26% of UK construction leaders pinpointing access to skilled staff as a key challenge preventing data adoption, developing in-house capabilities should be a priority to drive profitability in the coming years. The report also highlights that 32% of construction new starters in the UK have “basic” levels of data literacy, yet 61% of leaders surveyed said their firm’s investment in data training has either decreased or stayed the same in the past financial year.

“Every organisation – from owners to small contractors – needs to look at how they can use technology and data to meet the requirements of the Building Safety Act, but more generally to guarantee their success in a challenging macroeconomic background,” said Matt Keen, Director of Construction Strategy at Autodesk.

“The most important step is investing in people, and there has to be a skillset shift within the construction industry to navigate new regulatory demands.”