In the latest installment of his series on the economic impact of the Coronavirus pandemic, Dr Craig Dalzell argues that the current crisis must be used as opportunity to consider what kind of construction industry we truly need, and what it will take to achieve it.
LAST WEEK in Source I examined the OBR’s questionable “reference scenario” about the economic impact of the coronavirus pandemic and the lockdown we’ve all be in for the past five weeks. Over the next several weeks I’m going to dive into one of the sectors on the chart below and discuss the impact on them specifically and what could be done post-lockdown to make sure we get to a better place than where we were going in.
The construction industry has been one of the hardest hit over the direct impacts of lockdown. Construction sites have been largely shuttered with “non-essential” works told to close by the Scottish Government on 6 April. Similar advice issued by the UK Government has resulted, by the OBR’s estimates, in a reduction in construction activities by around 70 per cent.
Even without the direct mandate from government, it is very likely that construction would have been hit anyway both by illnesses among workers and by lack of demand. Real Estate is down 20 per cent as people decide that this is perhaps not the best time to move house and I would imagine that for every furloughed worker using their extra time to do some DIY, another out-of-work person will have put it off.
And that’s if they can get supplies at all. As I write this, we’ve just taken delivery of a couple of surplus railway sleepers for a project we have in mind for our garden. The guy who dropped them off mentioned that most of his supply chain (with the curious exception of the sleepers) has shut down too. Both supply and demand have been hit hard by the pandemic.
But the construction lobby is a powerful one. And the UK Government is both under pressure to re-open the economy and under pressure to be seen to be re-opening the economy. In the last few days, several large construction companies have stated their intention to re-commence construction.
The politics of re-opening construction sites too early should be obvious – the risk of creating and spreading new hotspots of infection will be high and this should be a far greater overriding principle than protecting the pockets of volume construction companies and their shareholders.
There is also the threat of losing a vital opportunity here. The current volume construction industry is failing us all. Prices are kept high and quality is kept low – even to the point of new builds being found to fail basic standards.
We should be using this moment of pause to reflect on what kind of buildings we actually want to build. The pandemic hasn’t obviated the climate emergency and the deadlines for that are looming. We shouldn’t be constructing buildings today that will need to be retrofitted later to meet zero-carbon standards and with the deadline for Scotland being a zero-carbon nation only 25 years away we certainly shouldn’t be constructing things today that will last less than 25 years. Ergo, every new building that Scotland (and the UK) builds from today onwards should be zero-carbon. There is no excuse for doing otherwise at this point.
Sure, the construction industry will complain that their supply chains aren’t set up for this. Then the lockdown should be a good excuse to sort that out.
Sure, the industry will complain that change will be expensive – then make change a condition of any bailout packages they want as a result of the pandemic.
And if they complain that they can’t do business at all, then nationalise them and protect the jobs of the workers that they’re abandoning – we need a National Housing Company and national housing strategy anyway. Common Weal has been working on this strategy for some time now and will soon publish a paper showing how the National Investment Bank can fund the construction of these types of homes.
The result would be high quality – and cheaper – homes for the people of Scotland and a new culture of building that wouldn’t be based on throwing up as many crap boxes as possible in order to maximise private profits. We’d solve a great deal of our impact on the climate and we’d greatly improve the wellbeing of people currently faced with buying a new home that is already almost falling apart. We’d probably find that the wellbeing of the construction workers improves too with more pressure to create something worthy of taking pride in rather than just meeting this week’s quota.
Build Back Better
The pandemic is a trying time for everyone and there isn’t an economic sector out there that hasn’t been negatively affected but this shouldn’t mean that we race other countries to be the first to return back to normal. “Normal” for the construction industry has been decades of cold, damp, expensive homes. We deserve better than that and if “normal times” weren’t incentive enough to create the change required then perhaps a global lockdown is the time to do it. The things that were failing us have already stopped, why restart them? Why not instead build back to something better?
Picture courtesy of maerzbow