A panel of experts, chaired by Globespan Media’s Editorial Director Rupert Bates, asked if the housebuilding industry’s supply chain is fit for purpose at an exclusive round table hosted by Jablite in partnership with Show House.
The panel opened in agreement that the main problem was one of capacity, with the housebuilding industry cemented in a worsening skills crisis. “There is a major issue with onsite labour,” said Greg Hill of Hill Group. “We have an aging workforce and don’t know how the Brexit negotiations will go. The supply chain in the UK is extremely fragmented – 85% of construction companies have 10 employees or less.”
It doesn’t help that housebuilding is a cyclical industry. “We need greater flexibility to deal with economic challenges,” said Rebecca Larkin of the Construction Products Association. “During 2008 the economy contracted 5%; construction contracted 15%; and housebuilding contracted 42%.”
With such vulnerability to economic shocks, it is difficult to convince long term investors and new talent to engage with the industry.
“Unfortunately, we all remember 2008, and we have a huge problem,” said David Jervis of Spitfire Homes, adding that the industry continues to contend with an image crisis. “In terms of management we have a large workforce but not physically onsite. We need engineers, IT, sales staff… We’ve got to attract the youngsters. How do we get more people into the industry?”
According to Geoff Pearce of Swan Housing Association, offsite construction offers the industry the chance to reinvent itself. “We need to look at different ways of doing things,” said Swan. “Not just modular and offsite construction for homes, but across the whole board.”
However, attracting the investment needed for innovation into a cyclical industry remains an impediment. “The construction industry struggles with innovation which comes down to cyclicality and long-term investment,” added Pearce. “Historically, whenever there is a recession factories and the people who work in them are the first to go.”
Housebuilders are also under enormous pressure to meet targets, which can make them reluctant to take a risk on new technology.
“We are focussed on sales targets,” said Andrew Burgess of Churchill Retirement Living. “We welcome any innovation but we need to be shown clear benefits. However, we are very cautious about innovation and we need to know it won’t slow the build programme.”
There is also the issue of the extended supply chain, i.e. mortgage lenders. “It is hard to get a mortgage for anything that isn’t built with brick or block,” said Larkin. “That will block a large proportion of a housebuilder’s sales.”
There is also the issue of scale, as offsite construction companies tend to be small in size. “The offsite sector is small,” said Pearce. “When you are relying on a small company, you are much more beholden to them to manage their business properly.”
In spite of the psychological barriers that brick-and-mortar-loving Britain would have to overcome, it was suggested that the move towards factories would help the supply chain to become more integrated.
According to Peter Andrew, Home Builders Federation, the housebuilding industry could learn a lot from retails who work closely with their supply chains. “To get the best value out of sites we need to involve the supply chain at design stage,” he said. “We have a long way to go with this. How can we work together to create a slicker product and push the quality up?”
The debate continues in the May edition of Show House, where you can read full coverage of the event.