At one time, the construction industry was the underpinning sector of the Wales’ economy. Nothing happened without builders, developers, or construction firms driving forward projects that underpinned every sector.
In many ways, construction was the foundation upon which the Welsh economy was built. Fast forward to today, and while the industry remains a crucial pillar, we find ourselves facing many of the same challenges that were highlighted some years ago.
Just the other day, I came across a report undertaken 17 years ago by the then Welsh Assembly Government and industry that outlined the key challenges for the construction industry in Wales. It was called Building Companies Building Skills. These challenges included how to build local capacity, how to nurture indigenous skills, and how to make procurement work for the industry. Sound familiar? These are the very issues we’re still grappling with today.
Today in Wales, we have a sector that hasn’t moved forward enough, or hasn’t been allowed to.
When I reflect on the changes taking place in industry with new renewable energies, such as hydrogen and nuclear power, as well as the rise of wind energy, it’s clear that major shifts are happening all around us.
However, when it comes to the construction sector, many of the same issues that existed nearly two decades ago remain unresolved. We still face challenges in terms of skills development, procurement efficiency, and improving the image of the sector to make it more attractive to a diverse workforce.
It’s frustrating to see that, despite these changes in other industries, construction in Wales hasn’t fully seized the opportunity to transform itself. Today, the construction industry is intertwined with other sectors – manufacturing, digital technologies, engineering, robotics – and this intersection offers an incredible opportunity for change. But are we really taking full advantage of it? It feels like the sector is still stuck in old ways of thinking, particularly when it comes to procurement.
The key to moving forward is re-evaluating and fixing procurement skills.
One of the biggest issues holding the construction sector back is procurement. This has been a long-standing challenge and remains difficult to crack, particularly for the SMEs that make up the backbone of our industry. Procurement affects every aspect of a business, from planning, to the ability to train apprentices and develop wider skills. If we can’t get procurement right, the whole system suffers.
In recent years, there have been some very good innovations in procurement, and it’s important to acknowledge that. But alongside those successes, we’ve seen notable failures as well. Part of the problem, I believe, is the skills depth within the procurement sector itself. Do the officials who handle procurement in Wales have the right training and understanding of how to truly support the construction industry?
The introduction of social clauses and the aim to tie procurement to training and local employment goals are well-intentioned, but are they always executed effectively? We often rely on data to measure success, but how often do we interrogate that data to understand why certain initiatives work and others don’t? If we don’t learn from our mistakes, we risk repeating them.
One of the big questions we need to ask ourselves is whether the major contractor model – which has dominated large-scale construction for decades – still fits the modern world. We’ve seen what happened with the sad demise of ISG and Carillion and other major players, and there’s an argument to be made that the model is starting to deteriorate. In its place, we need to look at how innovative Wales SMEs can be encouraged to take on more significant roles in the construction ecosystem, something they are keen to do. We already have some notable success stories.
Wales has a wealth of strong SMEs that have the potential to step up, particularly when it comes to sustainability and the net-zero agenda, which is going to be key over the next five years. However, many of these businesses are not motivated to take that leap because of the risks associated with procurement and the challenge of investing in new capabilities without a guaranteed return. If we don’t address this, we risk stifling the very innovation that could drive the construction sector forward.
To overcome these challenges, we need a more collaborative approach between government, local authorities, and industry leaders. There is a clear positive intent to work together, but the structures in place – especially within the procurement system – are not always conducive to true collaboration. We need to move beyond transactional relationships between the public and private sectors and focus on building partnerships that encourage shared risk and shared reward.
This will require a shift in mindset, particularly in how we approach the SMEs that are often the most agile and innovative players in the industry. We need to support these businesses, not just with financial incentives but with a procurement system that encourages them to invest in their own future by stepping into new markets, adopting sustainable practices, and developing the skills needed for tomorrow’s challenges.
Another pressing issue is the skills gap in the construction sector. As we push towards modernisation – embracing digital technologies, automation, and sustainability – our workforce needs to keep pace. Yet, we are not seeing enough investment in skills development. Apprenticeships, training programmes, and Continuing Professional Development (CPD) for those already in the industry must be prioritised if we’re to meet the demands of the modern built environment. We need to work together to support innovative training methods, a quicker approval of qualifications and a recognition of organisations and federations that work in the critical built environment sector beyond traditional construction training. There are some excellent examples of school engagement programmes and specialist training charters, with the ECA Electrical Contractors leading the way.
Furthermore, we need to address the diversity issue within the sector. Construction is still seen as a male-dominated field, and we have to work harder to attract women and individuals from diverse backgrounds into the industry. This isn’t just a matter of fairness – it’s about ensuring the future vitality of the industry by tapping into a wider talent pool. The work of the Future Generations Commissioner is creating a real interest from more young people to look at the sector in a different way and we must respond to that challenge.
The construction sector in Wales has enormous potential, with a number of key groundbreaking infrastructure projects but it’s clear we’re facing significant hurdles.
There’s no doubt that construction remains a vital part of the Welsh economy and we have the sector in Wales to deliver, but the way forward is not simply to continue with business as usual. We need to embrace change, foster innovation, and work collaboratively to build a more resilient, sustainable construction sector that meets the needs of Wales in the 21st century.
