Measuring export performance for the UK construction sector
Start Date: 01/11/07
End Date: 31/10/09
Project Status: Current
The UK construction sector contributes 8.2% of the nation’s GVA (Gross Value Added) according to the DTI, and so its competitiveness has a significant impact on the economy. Export success is strongly linked to competitiveness and so the statistics are very important
The measurement of tangible goods such as building materials are much easier to undertake and building materials export figures are accessible and easily understood. The export of services is far more difficult.
The statistics are not easy to find (they do not appear in one construction-related document) and the classification is not clear. For example, engineering can mean different things to different people. If the statistics are to be used effectively by enterprises they need to be user-friendly and relevant to their needs. There is a tendency to treat the sector as one, rather than recognising the number of different sub-sectors, each with very different business strategies, output and profit margins. The measurement of exports needs to reflect the complexity of the sector and its different customers.
The current method of measuring construction-related services exports does not reflect the changes that have taken place in the construction sector over the past ten years:
- An increase in foreign ownership of enterprises requires different account reporting, making measuring exports much more complicated.
- Exporting in the construction sector is now focused on products and process rather than people.
- The competitive advantage for exports is increasingly in knowledge, technology and finance/investment, whereas 25 years ago, companies based expatriates overseas to deliver.
- Globalisation has created seamless boundaries and the ability to move people and products from low-cost economies.
In short today’s business model is very different from that of a decade ago, with:
- Increased fragmentation.
- More outsourcing.
- An increasingly complex supply chain with many goods being sourced from around the world.
- A changing labour market with many overseas workers migrating to find work.
- More foreign ownership of UK companies and greater competition for UK companies seeking work overseas.
The project
The 2-year research project, based at the University of Reading, is funded through the Innovative Construction Research Centre (ICRC). Industry involvement is through the industrial partners acting as a Steering Group (meeting three times a year) for the project and allowing access to their members for surveys/interviews.