Is the SA construction recovery also depended on education, healthcare and infrastructure?

“Based on the three pillars of education, healthcare and infrastructure the UK construction industry can build back better as these new opportunities emerge and those with capabilities, expertise and experience will benefit most” says Paul Gandy  in an opinion piece

Should SA also base its construction recovery on the three pillars i.e. education, healthcare and infrastructure?

Education, healthcare and infrastructure: the three pillars supporting our sector’s recovery

In recent weeks, the UK Government has laid out its plans to reboot the economy as we emerge from the COVID-19 lockdown, and there is much to be cautiously optimistic about for our sector.

Prime minister Boris Johnson unveiled the government’s ‘build, build, build’ strategy with a commitment of an immediate £5bn to support a rebuilding programme for schools and hospitals across England. As one of the country’s leading education and healthcare contractors, we welcome the prime minister’s announcement to get Britain building again.

A 10-year infrastructure plan for education and the NHS provides the construction sector with a decade-long framework in which it will create valuable skilled jobs – particularly in the regions.

Following Johnson's pledge, chancellor Rishi Sunak announced the Treasury’s commitment to support job creation in the construction sector and the UK Government’s £1bn investment in 'greening up' public buildings including schools and hospitals. The chancellor’s planned investment in traineeships for 18-to-24-year-olds and a National Insurance holiday for employees, which could create several hundred thousand jobs, should also be welcomed because the new funding for traineeships will ensure that the UK construction sector can revamp its skills systems to support the government’s vision.

Topping off a trio of favourable announcements, transport minister Andrew Stephenson highlighted in Construction News the Department for Transport’s £120bn investment in the Transport Infrastructure Pipeline and the creation of the Transport Infrastructure Efficiency Strategy Living Lab, an information sharing platform to deliver the UK’s infrastructure.

Three words stand out

For me, three key works stand out from the government’s recent announcements: healthcare; education; infrastructure. These are the three pillars on which the construction sector’s recovery and, that of the wider economy, will be built.

So there was a neat serendipity that the government’s announcement coincided with the publication of UK Construction Forecast 2020-2022 by construction intelligence group Glenigan in which they forecast that the three key construction sectors that will grow over the next three years are healthcare, education and infrastructure.

The authors forecast that the outlook for the health sector remains bright with 2 per cent growth this year and 27 per cent growth in 2021. The authors note that the outlook for the health sector remains buoyant with increases in NHS capital funding promised by the government, with an extra £20bn committed to the NHS over the next five years. This includes a 14 per cent rise in capital funding for the NHS in England to £6.7bn in 2019/20.

“Based on the three pillars of education, healthcare and infrastructure the construction industry can build back better as these new opportunities emerge and those with capabilities, expertise and experience will benefit most”

In education, England is projected to see an increase of 13.6 per cent in the number of secondary school-age children and new schools will be required to accommodate the growing student cohort. We have witnessed this ourselves as we break ground on the site of the new Saddleworth School, near Oldham, where the new school will house more than 1,500 pupils. The government’s pledge to increase capital investment will help accelerate the delivery of much needed school places and lift new school building starts in the long term. The team at Glenigan say they anticipate the value of project starts to jump 53 per cent in 2021.

On infrastructure projects, Glenigan notes that Highways England’s development programme is gathering momentum alongside an anticipated boost in road projects by local authorities and has forecast 31 per cent growth next year and a four per cent rise in 2022.

The government’s Road Investment Strategy will spend more than £27bn between 2020 and 2025, taking forward schemes such as dualling the A66 Trans-Pennine route, and upgrading the A46 Newark bypass. And while many will focus on HS2, we anticipate significant growth in small road projects particularly in the regions where the government has pledged to 'level up' and shown they now understand that local networks matter as much as big national projects.

COVID-19 has reshaped the construction sector and its recovery from the pandemic will take time but based on the three pillars of education, healthcare and infrastructure the construction industry can build back better as these new opportunities emerge and those with capabilities, expertise and experience will benefit most.

This opinion piece was written for Construction News by Paul Gandy the managing director of Interserve Construction