The current state of our infrastructure industry and why do we need to change?

We’ve witnessed an unprecedented succession of global events over the last few years including a Covid19 pandemic, Brexit and the UK’s decision to radically change its relationship with the European Union, war on the eastern edges of Europe following Russia’s invasion of Ukraine and increasingly mounting concerns over the impacts of climate change. It’s difficult not to wonder “what’s next”?

Individually these events would be challenging, however, this succession and overlap of events has piled huge pressures, uncertainties and risks on businesses across the globe. Economic volatility is encouraging inflationary pressures across even the traditionally “stable” states with an increasing instability of costs and availability of essential commodities such as food, raw materials and energy as well as labour, particularly skilled.

More specifically, the impacts on the construction and infrastructure sector has been particularly acute. Arguably through much of the “teenies” we had a decade of stability with steady growth, extremely low interest rates and negligible levels of inflation. But now we’re seeing pent up demand for construction investment following the easing of pandemic restrictions “crashing in” to a limited supply side struggling with the challenges of inflation on construction materials, a limited availability of skilled workers and a construction sector which continues to try to pass far too much risk down the supply chain. And whether we like it or not this is exacerbating the wellbeing of our people as they struggle to cope with these difficult demands. This is pushing up costs across the board whilst many construction clients continue to work to outdated and unrealistic budgets.

So, where do we go from here?

We often speak of value. Value for money, whole life value. Given the unprecedented circumstances that we’re having to deal with isn’t now the time we took “value” seriously and accepted that the traditional, business as usual, lowest price first outlook is seriously out of step with where we need to be and what we need to be delivering? Will an obsession with transactional relationships, lowest price tendering and all-risk transfer down the supply chain ever really allow us to properly deal with the challenges of climate change, carbon management, social value? Will the adversarial and non-engaging approach to delivery do anything to help attract more people to our sector or improve the wellbeing of our workforces?

If we can agree that “Value” becomes the basis of our decision making, rather than lowest price, then we can focus on how our investment can deliver the best and broadest outcomes over its whole life, rather than dwelling exclusively on delivering to the lowest possible initial price.