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What is needed for the Construction Industry to evolve to Modular?

By September 7, 2022November 10th, 2023No Comments

In Boardrooms around the World there is a significant amount of time, effort and resource spent on finding ways to increase productivity, reduce environmental impact, get products to market quicker, build the product to a higher quality, overcome a skills shortage, and whilst attempting to balance the gender profile in the workforce and the senior team.

All of those are well documented benefits of Modular Construction (MMC), so why is it that modular construction still accounts for less than 10% of the UK construction market. Here Antonio Lopez, Director of New Opportunities, looks at some of the issues and explores solutions to unlock the potential of Modular Construction.

The Need for Collaboration and Information

There can be little argument that the construction industry is cautious when it comes to change. Risk averse might be a better description. This is partly the reason why, according to the ONS there has only been a modest increase in construction productivity over the last 50 years. Knowing that gives some insight as to why some investors and construction companies have been slow to adopt modular construction.

Often, we hear the same questions: Will they be able to secure funding? Will there be unforeseen issues down the line? Will they be able to sell the properties?

So how does the modular industry overcome these preconceptions?

Firstly we must explain our product in detail. This evangelisation process is one of the simplest ways to address misconceptions. The efforts to work collaboratively are providing meaningful real accurate data and information to dispel doubt.

It is unlikely that one modular construction company in isolation will hold and provide sufficient data to influence a whole industry. Companies involved in modern methods of construction (MMC) are coming together through the likes of Make ModularBuild Offsite and Offsite Alliance, where a raft of information can be produced and made available.

Is Modular more Expensive?

Traditional construction costs have been notoriously volatile recently. Whilst the fluctuation on the cost of material will affect all methods of construction, modular manufacturing enables auditable processes that reduce wastage, increase efficiency and lower contingency costs. Additionally, the skills shortage are pushing traditional construction labour costs higher where manufacturing allows for a controlled environment where operatives can carry out their duties in a safe and controlled environment, whilst they benefit from the economies of scale as orders ramp up. More about this later!

Unlike traditional construction, the controlled environment and manufacturing processes allow modular construction to provide greater cost certainty and project delivery certainty.

How can Modular help Achieve Net Zero?

One of the biggest challenges facing every business and particularly the construction industry is the drive to Net Zero. Currently the construction industry is one of the higher carbon emitters, however following the release of an independent study earlier in the year demonstrating as much as a 45% reduction in embedded carbon, surely Government and industry leaders need to sit up and take notice of the potential modular construction has in reducing carbon. If as is widely anticipated the Embedded Carbon Bill comes into force, Modular construction offers a robust solution.

The carbon reduction delivered by MMC extends beyond embedded carbon. Operational and end of life carbon savings deliver a sustainable living model for the current and future generations. A sister company within the Stelling Properties group operates both traditional and modular constructed buildings, there is around a 15% reduction in utility usage for the buildings using modular technology due to the superior build quality, this represents a significant saving for the occupants and indeed can deliver a real benefit to those struggling with fuel bills.

The controlled factory environment delivers a better quality of build allowing homes to achieve an EPC A rating, this significantly reduces the amount of energy used to heat the homes, thus both reducing the carbon impact of the building and the fuel bill of the occupant.

When it comes to end-of-life modular construction allows for the building to be repurposed, reused, or refitted, significantly reducing the end-of-life impact of the building.

What role can modular play in ensuring Compliance

It would be wrong not to recognise Grenfell and the impact the disaster will rightly have on shaping the future of the industry. There is certainly a lot of anecdotal evidence to suggest that firms have subsequently been choosing to play it safe by continuing to use traditional construction, however what the fire has exposed is the weakness of traditional construction, in terms of unsupervised onsite labour, whereas with modular construction, adherence with legislation is designed into the manufacturing processes ensuring that the standard is achieved throughout a project.

Solving the Skills crisis

There is a well-documented skills crisis facing the construction industry with potential new entrants not looking to pursue careers in the construction, and it is easy to see why people are reluctant, as your place of work can change at short notice, you may well have to be self-employed, and by the nature of role the conditions can be challenging. Modular construction, with its controlled environment provides a more pleasing working environment, significantly reduces the health and safety risks, is in a fixed location with set working times and a workforce that is PAYE and has job security.

And whilst Modular manufacturing is not immune to the issues of attracting and retaining good talent, it does provide a career opportunity for new entrants, and those with construction experience who no longer want to work on site, it also provides the chance of addressing the gender imbalance in the workforce.

High Profile Failures

As has been widely reported in the trade press there have been a number of high-profile failures of modular construction companies, this will inevitably lead to greater scrutiny of those companies still in the industry. As is always the case when an industry is in its infancy there will be business that are less successful, setting up and running a factory is costly, with the benefits only realised once the factory is operating at full or near full capacity.

Therefore, the need to be build a robust pipeline of work is clear and obvious to see, and this is where Government who through their policies are a supporter of modular construction can play a bigger role in ensuring the benefits of modular construction are realised.

There are three immediate areas  which should be considered, firstly the £12bn affordable homes program requires 25% of all homes to be built using MMC, but why 25%, why not 50%, this would guarantee that newer high-quality homes are built. Second is give planning priority to Modular Construction projects. Thirdly stipulate that all new homes must achieve an EPC rating of A.

The suggestions are potentially controversial and would meet resistance from traditional construction companies, however if we want to address the issues that face the construction industry, reduce the environmental impact of the built environment and reduce domestic heating bills, then there is a need for radical action, the suggestions would go a long way to ensuring that the Net Zero targets are met, the skills crisis and gender inequality  are addressed, and much needed high quality sustainable homes are built quickly and safely.