Building Britain: Can the construction industry meet the 1.5 million homes target?

Steve O’Keefe, regional vice president for the UK and Ireland at Epicor (Photo: Epicor)

But with this goal comes a host of challenges, from labour shortages to skyrocketing material costs. Construction Briefing spoke with Steve O’Keeffe, regional vice president for the UK and Ireland at Epicor, to explore how the construction industry is preparing to meet these demands and the role technology will play in shaping its future.

Q: The UK government’s plan to build 1.5 million homes by 2030 is undoubtedly ambitious. Do you think it’s achievable?

Steve O’Keeffe: It’s ambitious but I believe it is achievable. In fact, it’s exactly what the country and the industry need. We’ve come out of a pre-COVID period where the construction sector was performing fairly well in terms of new projects. But since the pandemic, we’ve had to regain momentum, both as a country and a global industry. While there are certainly challenges, it’s crucial to set ambitious goals and strive towards them. The UK housing market, in particular, requires these kinds of bold moves to keep up with demand.

Q: What would you say are the biggest challenges currently facing the construction sector?

O’Keeffe: The two most pressing challenges right now are the labour shortage and the skills gap. We are dealing with a significant shortage of skilled workers across certain key areas in the industry. This is really holding us back from advancing and meeting the government’s targets. Additionally, material availability and the rising costs of essential resources like timber and steel are making it tough. These materials are critical to construction, whether we’re talking about residential or commercial projects, and their increasing costs put financial strain on the industry.

Q: Can technology help address some of these issues? If so, how?

O’Keeffe: Absolutely. Technology is already helping to overcome some of these challenges. For example, smaller companies within the building supply sector are starting to use artificial intelligence (AI) and automation to streamline their processes and cut down on costs. These technologies allow businesses to operate more efficiently and help them stay competitive.

AI can streamline both direct and indirect labour costs. For instance, it can optimize resource allocation in areas like HR or finance, which are critical to back-office operations, and also give better visibility into demand and capacity. AI is also being used to enhance customer service and speed up interactions, which improves the overall customer experience.

Q: Speaking of AI, there’s been some hesitation in the past around adopting it. Has that changed?

O’Keeffe: It has changed, though there’s still some confusion about how AI can be applied. Over the past 6 to 12 months, however, we’ve seen a significant shift. Organizations in the construction industry are now realizing that AI isn’t just a buzzword—it has practical applications that can improve day-to-day operations. Companies are seeing tangible business use cases, like improving customer experiences and making processes more efficient, which is helping change perceptions.

Q: Given the challenges, is the industry really equipped to meet the government’s housing target?

O’Keeffe: The industry needs to be equipped to meet the demand, but we’re not there yet. There’s still work to be done to bridge the skills gap and address the supply chain issues. We need to identify where the weaknesses are early on, so both technologists and construction professionals can come together to deliver on the government’s plans.

Q: Finally, what do you see next for the construction and building supply industry?

O’Keeffe: Looking ahead, the industry is in a better position than it was a couple of years ago. In 2021 and 2022, around 22-26% of construction companies became insolvent, which was a huge blow to the sector. But despite these challenges, there are encouraging signs, with infrastructure projects and general development picking up across the UK.

Globally, the construction industry is projected to grow from £13 trillion in 2023 to £22 trillion in 2024, and the UK is set to play a significant part in that. With the right investment, we can expect a strong 24 to 36 months ahead. We need to continue investing in technology, especially in areas like supplier management and inventory visibility, which can help optimize operations and ensure projects remain on track.

Technology offers a massive opportunity to improve visibility across the supply chain, manage costs, and enhance efficiency. With better tracking of energy consumption, inventory management, and real-time monitoring, construction companies can cut down on waste and improve their overall performance. Embracing these technological advancements will be key to navigating the next phase of growth in the industry.

As the UK looks to ramp up construction and meet its housing needs, it’s clear that innovation, technology, and collaboration will be critical in overcoming challenges. Steve O’Keeffe’s insights shed light on the industry’s readiness and optimism for the future, even in the face of ongoing obstacles. The road ahead will require careful planning and execution, but with the right tools and investment, the UK construction market is poised for growth.