Dan Goodson, Head of the Procurement Heads Industrial Practice reflects on how the construction and infrastructure sector is evolving in the UK, examining key sources to predict the future of the industry.
Current Market, Economic Dynamics
The UK infrastructure market is currently experiencing a dynamic phase, with significant developments that are shaping the future of construction and infrastructure in the country. I have observed a series of trends and challenges that are influencing the current market.
Investment in infrastructure remains a cornerstone for economic growth, and the UK is no exception. The Office for National Statistics reports a 3.9% increase in market sector investment in infrastructure in 2023, amounting to £13.8 billion. This reflects the government’s commitment to bolstering the economy through substantial infrastructure projects. However, it’s not just about the numbers; the quality and sustainability of these investments are paramount.
The National Infrastructure Commission’s 2024 Progress Review highlights the expansion of digital networks and the devolution deals for city regions. Allowing autonomous infrastructure strategies. Yet, challenges persist, such as the low uptake of electrified home heating options and uncertainties in rail strategy, which could impact the long-term prospects of UK infrastructure.
KPMG’s insights into navigating supply chain challenges shed light on the high demand and fluctuating investment in the sector, which, coupled with a reducing and ageing workforce, creates regional hotspots of supply chain pressure. It’s clear that a strategic approach to supply chain management is needed to ensure the timely and on-budget delivery of infrastructure projects.
Inflation has also left its mark on the construction industry, with Barbour ABI reporting a 15% rise in output values from 2021, despite the real value being affected by price increases. This inflationary pressure adds another layer of complexity to project planning and execution.
The UK infrastructure market is at a crossroads, with opportunities and challenges coexisting. Investment and development continue to drive the sector forward, but the need for strategic planning, sustainable practices, and robust supply chain management has never been more evident.
Supply Chain Challenges & Evolution
The Transforming Infrastructure Performance: Roadmap to 2030 published by the UK government underscores the importance of procurement professionals in achieving high-quality, sustainable, and resilient infrastructure. It highlights the need for a skilled workforce that can contribute to the government’s vision for the future of the UK, which includes meeting net-zero emissions by 2050 and addressing the challenges of a net-zero economy.
The Infrastructure and Projects Authority (IPA) also recognises the value of procurement professionals in delivering the £650 billion investment forecasted for infrastructure over the coming decade. The IPA emphasises the need for innovative solutions and new technologies to improve project performance, which procurement professionals are uniquely positioned to facilitate through their roles.
Procurement as a Strategic Partner
Procurement within the infrastructure sector is more than just a support function; it is a strategic partner in the delivery of successful infrastructure projects. Their expertise and actions directly influence the UK’s ability to meet its infrastructure goals, making them indispensable contributors to the nation’s economic growth and sustainability efforts.
As the UK continues to invest heavily in its infrastructure, the roles of these professionals will only grow in importance, underscoring their critical position in shaping the future delivery of the industry.
The procurement recruitment market has seen a shift over the past year. The demand for procurement and supply chain staff remains, led by permanent staffing needs, with emphasis on technology procurement and supply chain risk expertise. This demand is reflective of the broader economic context, where technological advancements and sustainability considerations are reshaping the job market.
Compared to 2023 there’s a noticeable trend towards the integration of digital technologies, and a growing focus on ethical sourcing and sustainability. These shifts necessitate a new breed of procurement professionals, able to navigate the complexities of modern supply chains and contribute to the decarbonisation efforts within the construction industry.
Identified (Construction) Procurement Skillsets
Strategic recruitment of skilled procurement professionals is not just a response to immediate challenges but a forward-looking investment in the future. It’s about building a workforce capable of steering these sectors through current uncertainties and towards a more sustainable, efficient, and profitable future.
Having spoken to a variety of procurement leaders over the past few years, their viewpoint is that procurement professionals in the construction and infrastructure industries must possess a diverse set of skills. This enables them to navigate the complex landscape of modern procurement. Essential skills include negotiation, to secure favourable terms and manage supplier relationships; communication, for clear articulation of needs and expectations; and data analysis, to make informed decisions based on market trends and performance metrics.
Risk management is crucial for identifying potential issues and mitigating their impact, while financial acumen allows for the effective management of budgets and cost control. Sustainability and ethical sourcing are increasingly important, as companies seek to reduce their environmental impact and ensure responsible supply chains. Problem-solving, adaptability, and technological proficiency are vital, enabling procurement professionals to respond to dynamic market conditions effectively.
These skills collectively enhance the capability of organisations by ensuring that procurement strategies are not only cost-effective but also resilient, and adaptable to change. For example, strong negotiation skills can lead to better pricing and terms, which directly impact the bottom line. Similarly, a deep understanding of risk management can prevent costly delays and disruptions. As the industry evolves, these skills become even more critical, with a growing emphasis on sustainability and the integration of technology in procurement processes. The ability to harness these skills effectively can lead to significant competitive advantages.
The Role of Procurement Heads
Procurement Heads’ Industrial Practice is predominantly tasked with the critical role of sourcing and securing top-tier talent. Professionals who can managed complex projects. We attract professionals who can manage the intricacies of modern infrastructure development. The ability to understand and anticipate the needs of the market, and to respond with agility, is paramount.
Our purpose is to deliver recruitment as a professional service, our goal is to become our client’s strategic partner in the delivery of their own objectives and goals throughout 2024 and beyond.
Our References:
Office for National Statistics
