Whitepaper: A Focus On: Offsite Construction
Offsite construction is an increasingly popular process choice. It’s a broad term but one that basically includes any component that has been constructed somewhere other than the location of use. In this whitepaper we will examine the increasing popularity of offsite construction and the advantages it has for the industry and for clients. We’ll look at the pros and cons, as well as the specific implications that offsite construction has for the UK housing market and skills supply chain.
Offsite construction – a logical next step?
With increasing popularity and use in modular-style construction projects (see Grand Designs for plenty of examples of these kinds of builds), offsite construction is seen by many as a new way to create structures. There are significant differences between offsite construction and the more traditional project, the most obvious of which is that the not everything on the site has been constructed there. Instead, construction takes place offsite and the results are then transported to their final location.
A welcoming market
Self-build is of increasing interest in the UK, particularly given the shortage of affordable housing and the need to find alternative options for property construction and ownership. The popularity of self build is rising – according to government figures around 7 – 10% of construction completions are currently self-build but around 53% of people in the UK would consider building their own home given the opportunity. These self-build projects are particularly offsite-construction friendly and could generate a greater demand, particularly if the government looks to encourage self-build at similar levels to other countries in Europe (for example, Austria where 80% of homes are self built).
As well as a growth in the self-build sector advances in technology, and design and construction innovation, have also made offsite construction more appealing, and more possible. There are many more examples of offsite construction projects that inspire everyone from investors and stakeholders to homeowners to pursue this type of approach as an option. Whereas it may once have been viewed as a compromise option, offsite construction now has some genuine benefits that make it an appealing construction choice.
Offsite construction has many positives with widespread implications right across the industry. With more to offer than just advantages for individual projects, this type of construction has benefits that go much further than a single supply chain or job.
Collaboration – there’s no doubt that offsite construction is strengthening when it comes to generating collaboration. In particular, it encourages better collaboration between academia and hands-on experience and this has a knock on effect on the design of training and qualifications. Industry-led training is by far the most effective and this kind of collaboration ensures that such an approach is the dominant one.
Improving relationships – particularly between construction and manufacturing parties, as well as research bodies. Offsite construction provides a way of sharing knowledge and expertise, which can lead to more innovative solutions for the industry as a whole. This applies to many different parts of the sector, from the sharing of technological advancement, to labour statistics that can be used to generate interest in the market.
Multi-skilled training – offsite construction encourages a broader knowledge base in workers and establishes a demand for a wider range of skills and experience. This opens the door to multi-skilled training that will create professionals with a much more extensive knowledge of materials and understanding of techniques. This kind of training results in workers who can handle a variety of different challenges and have the kind of broad skill set that is fertile soil for innovation.
Job opportunities – the kind of multi-skilled training encouraged by offsite construction produces a mixed skill set, useful across many different areas, ensuring a wider range of job opportunities. It can also make construction a much more appealing industry to join, particularly for Millennials who are the most urgently required target demographic for recruitment into the construction sector.
Industry-wide education – offsite construction is innovative and involves many of the latest design and build techniques. As it becomes more popular it will result in better education of those in the industry with more information on the latest developments disseminated much more widely. This could help to fill skills gaps but also to create a much broader understanding of what technology and manufacturing could do together.
Outside of the industry there are many other benefits, not least the fact that offsite construction makes it easier and simpler to build the kind of lower cost houses that are most needed. Consumers are increasingly realising that this is an option and that offsite construction, while cheaper, often also delivers the best opportunity for the highest quality finish.
A new delivery model?
Embracing offsite construction could provide many advantages, both for consumers looking for homes and for those working in the industry. However, it’s a fairly new and untested delivery model that doesn’t come without its own set of problems. For those looking to establish offsite construction as the norm there are some key basics to consider:
- The client must have control over the entire project
- All options need to be explored, not just offsite construction
- Clients need to be in direct contact with suppliers
- Potential cost and time savings should be established at the start
- A government scheme promoting innovative construction would act as a launch pad
If some, or all, of these elements come into play then there are some very real benefits to using offsite construction as a new kind of delivery model.
Manufacture speed – as long as there is factory space and raw material resource available, project construction time can be considerably reduced by creating structures offsite. In fact, this model allows for work to effectively be doubled up – while foundations are being laid on site, the modular elements of construction can be in production. This considerably reduces the time required for the initial phases of the project.
Onsite efficiency – when the modular elements are finished they are usually transported as a complete piece, or as close as, and have short installation times. So the period of time required on site is reduced too, making the whole process much more efficient.
Project financing – the use of offsite construction can reduce costs by around 7%. This comes from a combination of the shorter build time, which has a knock on effect on the interest paid on borrowings as well as the daily time that needs to be paid for.
Portfolio projects – where an offsite construction is part of a series there are even more savings to be made. For example, across a large housing project.
Ongoing savings – offsite construction has advantages on an ongoing basis too, as any elements that need to be replaced or replicated can be constructed in the same time efficient way – offsite and then brought to the site ready to use.
Greater control – offsite construction tends to be a more reliable method when it comes to planning and budgeting. There is less opportunity for costs to spiral out of control and more certainty when it comes to expenses.
Reduced disruption – less time on site means less issues for the surrounding area, from noise pollution to an increase in traffic. Especially where buildings are being constructed in highly populated areas this is a significant environmental advantage.
What about supply chain impact?
Shifting construction offsite in this way significantly changes traditional processes and this could have an impact on the skills supply chain. It’s on this topic where critics of offsite construction are most likely to identify problems with increasing its adoption across the housing market. Here’s why:
Less time on site
Offsite construction will undoubtedly impact specialised trades, such as electrical and mechanical. Both will be less in demand than previously, which could have a significant impact on progress and prosperity in that part of the industry. Of course, the finishing off period will still require the presence onsite of specialised trades – no building could be completed without them. However, the time required will be substantially cut thanks to the degree of factory automation in the earlier stages. So, while consumers and developers save money, specialised trades lose out.
There is an argument that increased mechanisation will reduce demand for human skilled workers per project. However, what is more likely is that new automated and mechanised techniques will actually introduce a different skill set, creating new opportunities for those willing to work with new materials and advanced construction methods. So, there won’t necessarily be a drop in demand for expert skills, rather a shift in the type of demand.
Varied skill sets
There’s no doubt that an increase in offsite construction would shift the in-demand skill set in the construction sector. A much more varied range of ability and experience is likely to be required. Experts who have this broad spectrum of skills will be the most in demand, as opposed to specialists focused on a narrower range of ability. Plus, there will be increases in other needs, for example the lifting and cranage needed to move offsite construction in to place.
Increased need for flexibility
As a relatively new approach, an increase in offsite construction is likely to demand greater flexibility from those within the sector. This could be problematic for some businesses. The shift in demand from construction skills to installation, for example, could mean that some workers feel excluded from their own sector. However, it’s widely accepted that this new shift won’t mean deskilling but will require the ability to adapt. As long as those in the industry can develop a broader skill set then the flexibility to go with the offsite construction flow will be there.
Are there any skills that will remain the same?
Of course, it’s not all change with the introduction of more offsite construction. There are many process that will be very different and projects may not seem to require the same components as previously. However, there are some skills that will still be fundamental for every project. For example, foundation work will remain a key element of every project, and one that cannot be completed offsite. Drainage is another part of construction projects that will stay the same and which must be completed on site before any of the modular elements arrive.
Where do offsite construction and the UK housing market meet?
Offsite construction – where modular elements are put together offsite and then transported in a state of completion – is a big change for the UK construction industry. At almost every stage of the process it will bring new challenges and opportunities for those in the sector, as well as the end consumer. But what does it mean for the UK housing market and where exactly will it impact?
An opportunity for genuine change
It’s no secret that the UK housing market is struggling – as are the consumers who are trying to get into it. Eye wateringly high prices are the result of a lack of housing supply in the UK, particularly when it comes to affordable housing. So, with offsite construction, is there an opportunity to change the situation?
A boost to housebuilding targets
The government’s aim of 1 million new homes before the end of 2020 is currently way off track. Actual build numbers lag well behind the 250,000 new homes per year target that the government set. There are many – often discussed – reasons for this. They are reasons that offsite construction could perhaps help to overcome, including reducing the cost of house building and putting control of the process more into the hands of consumers. The UK government is actively encouraging those seeking to explore new and innovative ways to create homes so there could well be some support in the pipeline for offsite construction – or at the very least a softening of obstacles that make it a challenge.
The market will benefit from quicker builds
Speed of construction is one of the major advantages of offsite construction and one that will have a significant impact on the wider UK housing market. More homes built within a specific timeframe could result in a relaxing of the tension that currently keeps people priced out. Experts from across the industry have predicted that offsite construction – with its reduction in construction time of around six months – will in fact play a role in meeting housing needs in the UK in the near future.
However, there are restrictions on offsite construction really taking off in the UK, not least the lack of manufacturing. At the moment only a small number of UK factories are able to produce modular housing and it is often shipped in from abroad. As interest in this kind of construction continues to build this should change.
Everyone benefits from innovation
Current methods of construction simply don’t deliver the volume of housing needed to help fix the problems that the UK housing market has. Innovative new offsite construction methods could genuinely change that. Not only does offsite construction make the build time shorter and reduce the onsite construction costs but there is no compromise on finish. This kind of innovation benefits almost everyone in the housing market and the construction industry. Consumers get a wider choice of more affordable housing and those in the industry get to respond to the greater demand for builds. Perhaps the only sector that really loses out is private landlords who could well see a loss of tenants as people realise that it is more affordable to buy an offsite constructed home (or build one) than to continue to pay ever increasing UK rents.
There are certainly pros and cons to offsite construction, depending on where you sit in the equation. Yes, there is limited resource to support it right now but all that could change – bringing with it new job creation and manufacturing demand within the UK. Yes, it would change the way that projects are scheduled and reduce on site time for certain trades – but shifting to a more multi-skilled approach would ensure that no man or woman is left behind. Then there are the recruitment benefits – the power to attract new faces that this more innovative construction option has. And finally, there are the issues that could arise with respect to the need to safely transport modular elements to a construction site. This is a challenge but one that the construction industry has the power to respond to, especially if it means the creation of more housing, on shorter timescales, with a reduced cost and no drop in quality.
If you’d like more information about offsite construction, contact the RG Group.