While the construction industry press continues to publish warnings of doom and gloom for the industry a recent report – 2021 Vision: The Future of the Electrical Contracting Industry shows that there are plenty of opportunities for the electrical contractor. And like so many opportunities, if you fail to take advantage of them, they will become a threat as your competitors act.
2021 Vision is a research project jointly conceived and funded by ECA and NICEIC, to provide a long-term view of the electrical contracting industry over the next 10 years. It identifies the likely scenarios which will shape our industry. Highlighting the character and structure of the wider construction industry, the economic outlook, client and main contractor requirements, the range of work which is likely to be undertaken, the knowledge and skills which may be required and key product development and installation trends. Download report.
In compiling it the authors contacted 34 leading thinkers who contributed their views in focus groups and individual interviews. They also reviewed 44 published reports, articles and government briefings to gather previously published views and opinions. In addition, 1000electrical contractors and related installation professionals who are members of the ECA or clients of NICEIC gave their views via on online survey.
Even before the election of the Coalition government a decline in new build healthcare was inevitable as, following a major investment programme, many of our older hospitals had been replaced with new buildings and the programme of renewal was coming to an end.
We also saw the rate of house building fail to meet demand, pushing up prices, prior to the financial collapse which then saw completions at their lowest since before the Second World War. With the continuing low lending rate there is unlikely to be a significant increase in output, and even if there was the collapse of many specialist contractors means that house builders are concerned that they would be unable to lift output significantly.
In the medium term, office construction, in London at least, is starting to recover. We also have numerous infrastructure projects. Rail development will include many stations and the renewal of our aging power stations is also a priority. However this will only compensate for the decline in public sector construction.
However the sustainability agenda will provide significant opportunities in renewable power generation as the programme to upgrade the UK’s existing building stock gets underway. Work will be required on virtually every building in the UK, with demand for systems to minimise energy consumption requiring the skills of electrical contractors for installation. So emphasis will move from new build to refurbishment which is set to be half of all construction activity by 2021.
There is no doubt that sustainability will be a major driver in the construction industry in the next 10 years. All three political parties are committed to the sustainable agenda. This drive is partly about reducing carbon emissions, but also to make the UK more energy efficient in response to increasing prices of oil and shortfalls in UK energy output. This will provide many new opportunities.
We already have Feed-in Tariffs encouraging home owners to install solar panels to generate their own power. Demand for these systems will increase significantly next year with the launch of the Green Deal in the Autumn. This will see a mechanism put in place to evaluate homes and propose upgrades to achieve energy efficiency with installation paid for through savings on their energy bills. To achieve this there will be a network of Green Deal Advisors and accredited installers. The government is keen that this will provide opportunities for the small and medium business as well as the larger companies and estimates that it will create a workforce of 100,000 to fit energy efficiency measures. Electrical contractors could develop their skills and knowledge of heating and lighting control techniques in order to provide energy efficiency services, act as Green Deal Assessors or become Green Deal Installers, replacing other trades.
Starting in 2014, a massive programme will see the installation of SMART meters in every UK households, with a target completion date of 2020. In addition to telling householders how much energy they are using this will allow a SMART grid to be developed. All of this will provide work for electrical contractors, not only installing the meters but also data cables to gather information about equipment usage.
By 2021 managing equipment operation will also become a major business. Many buildings will incorporate remote control and monitoring with high speed internet allowing specialist centres to take charge of this on behalf of building occupants. With far greater use of high-tech electrical systems demand for electrical and communications installations will be high both for installation and problem troubleshooting when they fail.
A new generation of electric cars will also become available in the next few years. This will require installation of charging points at homes, offices, in the centres of cities and at refuelling stations. For these new cars to succeed there will need to be a good network of charging points, providing plenty of opportunities for electrical contractors.
Changing building design and new products
In the past we have tended to demolish buildings when they no longer met our needs, by 2021 the preference will be to renovate and change the design to meet new needs. This will create opportunities to rewire complete buildings and retrofit energy efficiency measures. Customers will also be looking for trusted energy advisors to help plan their requirements, work with the construction team to install systems and ensure efficient operation after commissioning. If the electrical contractor can build his expertise and then demonstrate his competence he has the opportunity to perform that role.
Building design and construction will change with increased use of modular systems and components. While there will be far greater use of high-tech electrical systems they will also be modular and plug-and-play, connected with pre-formed cables or bus bars, de-skilling electrical installation on new-build sites.
New buildings will also be designed with far higher levels of energy efficiency, including energy generation and storage facilities. There will be major changes to the way we light our buildings. All of this presents opportunities for the electrical contractor who is up to date with new innovations and technology.
There will be a raft of new product developments in response to the need for energy efficiency in buildings, but also changes to the types of products installed and the way they are used because of the high cost of raw materials like copper. As a result cabling in buildings will have simplified, reducing the amount and complexity of work for electrical contractors. The approach to lighting will have also changed, with more ‘designed’ solutions often simulating daylight.
How electrical contractors will need to adapt
The drive to reduce construction costs will be apparent in changes to the supply chain, with specialists like electrical contractors expected to change working practices to allow greater efficiency. This will involve working more closely with both the designer and the main contractor and often dealing with more knowledgeable customers.
There will be new approaches to procurement and changes to the relationship between main contractor and electrical contractor. In recent weeks the government have announced the setting up of a construction board with the task of cutting public construction costs by 20%. Companies which respond to this, contributing cost saving ideas will benefit.
The government has said it will encourage increased use of small and medium sized contractors on public sector projects, providing new opportunities for many electrical contractors.
Government policy is driving towards simplification of regulations as well as harmonisation of EU standards. It remains to be seen if Part P will become stronger or weaker as a result. However there will be other measures to introduce codes of practices and certification for all contractor categories which should strengthen the position of the fully qualified electrical contractor who can keep up to date with new technologies and systems.
Building Regulations will demand that buildings are increasingly energy efficient creating opportunities to install renewable energy systems. Cross-over of trades will create opportunities for electrical contractors who are prepared to add new skills, but marginalise those who are not.
While the need for the traditional electrical contractor will remain, it will be only one of a range of skills. At a higher level will be the electrical contractor who acts as an energy manager, advising on installations and fine tuning them once installed. At a lower level there will be a need for a less skilled person who is merely connecting components together.
Because of the amount of controls in heating, cooling and hot water systems as well as renewable energy there will be a cross-over between trades. While the need for electrical wiring will be far greater, the de-skilling will mean that tradesmen from other disciplines can install, reducing the opportunity for the electrical contractor.
In the medium term we can expect a shortage of electrical contractors and initiatives will need to be taken to bring in new people to the industry, increasing apprenticeships. To encourage take up the method of funding will be changed. Electrical contractors will also have to respond to the new market economy by being more customer focused and promoting their services more effectively.
The electrical contracting industry probably has a much brighter outlook than any other group of specialist contractors in the construction sector. A raft of initiatives mean much greater work and the electrical contractor has the opportunity to build a reputation for expertise and provision of impartial advice, becoming more influential. Electrical contractors can work as advisors in a problem solving role, assessing buildings to determine work required, then fitting new systems and components. There is also an opportunity to instruct building occupants on how to use their systems.
Chris is founder of Competitive Advantage Consultancy Limited which specialises in market research and training for the construction industry. He is also a member of the organising committee for CIMCIG, the Chartered Institute of Marketing’s Construction Industry Group
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First Published: ECA Today, July 2011