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Costs and lack of experts hamper off-site manufacturing

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Capital costs and lack of expertise are the two top barriers to the uptake of off-site manufacture (OSM) according to a new industry report.

The Innovation in Construction Report written by law firm Clyde and Co said 59% of respondents believed investment costs was the primary factor hindering the implementation of OSM, followed by 48% identifying a lack of relevant expertise within their organisation.

Despite this, the report based on a survey of 30 executives from 50 of the top UK contractors said the industry was at a “tipping point” when it came to the uptake of OSM and although barriers existed, 61% of respondents said they expected the amount of OSM to double in the next five years.

The report also painted a similar picture for investment into OSM. Just over half (55%) of survey respondents said they invested only 0-2% of revenue on OSM in the last five years. However, in five years’ time it said just 6% expected to invest at this low level.

It went on to add that the majority planned to invest much more, with 39% planning to invest between 3-5% and 42% between 6-20% of revenue in OSM.

Clyde & Co projects and construction partner Robert Meakin comments: “OSM has been at the bottom of the UK construction industry’s tool box for decades but it is now being heralded by many as the key to tackling chronic low productivity problems.”

“Over the last couple of years momentum has been building and with the Government now actively encouraging the use of OSM in some of its projects, the tipping point appears to be within reach.”

Clyde & Co said the Government had recently committed to adopting a “presumption in favour of off-site construction” across several key departments, including the transport sector. In addition, the ‘Construction Sector Deal’ launched this summer identified OSM as one of its key areas of focus.

In July this year, a House of Lords committee said a “radical overhaul’’ of the construction sector was needed to meet UK infrastructure needs. It said the industry was ‘‘lacking in trust’’ and was too ‘‘fragmented’’ to implement widespread off-site manufacturing.

“Of course, one persistent problem that needs to be addressed is the lack of a secure pipeline of projects,” added Meakin. “Since the decline of PFI / PPP at the beginning of the decade, the industry has been dismayed by a severely limited flow of new schemes.

“As industry experts told us in our report, it would be a very difficult commercial decision to invest seriously in OSM technology without a clear plan of how and when it will deliver a return.”

According to the report, the top three reasons cited for investing in OSM were to to improve efficiency and reduce costs (97%), overcome new challenges in construction (84%) and help overcome the skills shortage (61%). 

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