UK market intelligence – market turbulence

Kristoffer Hudson


Winter 2015/16 - our overview of market conditions around the UK.

UK GDP increased by 2.3 percent over 2015 according to the Office for National Statistics (ONS). At a glance the growth in 2015 looks slightly underwhelming compared to last year’s figures – coming in 0.6 percentage points down on 2014. However, we now have had twelve consecutive quarters of positive growth since the first quarter of 2013, reinforced by a 0.5 percent increase in the three months to December 2015.

  • +0.5% Q4 2015 GDP
  • -0.4% construction output index
  • +0.2% consumer price inflation
  • -3.4% unemployment level

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UK market intelligence - winter 2015/16


Hot topic

BIM – why you need to be ready

The April 2016 deadline has passed. The UK Government requires the collaborative use of building information modelling (BIM) on all centrally funded projects. This means all project and asset data needs to be controlled in a fully digital environment. Public sector organisations in England and Wales are already implementing the directive. The Scottish Government will follow suit in 2017.

Going digital is a key part of the Government’s industrial strategy for the construction sector. In July 2013, the Government published its aspirations for the industry over the proceeding decade in Construction 2025. Intelligent use of BIM and collaborating in a digital environment was one of 6 key commitments established in the strategy. The strategy is overseen by the Construction Leadership Council. The timetable encouraged the public sector to commit to moving into BIM Level 2 (designing in a process driven, digital collaborative environment, inclusive of schedule and cost parameters) by April 2016.

The government is taking this early adopter position on digital to exert its competitive advantage. It is the key purchaser, operator and occupier of real estate and infrastructure assets in the UK.

What is Level 2 BIM and what are the consequences if it not adopted by April 2016?

BIM Level 2 is the definition given to a digital design which fully integrates data, code and labelling to create an ‘information model’. The model contains all information, graphical and non-graphical, generated by a project team. It is not merely a 3D design but inclusive of key project dimensions such as scheduling, capex, life cycle performance and health and safety.

There is no penalty for not having the BIM Level 2 capability but it is now a requirement if vendors and suppliers wish to be considered for public sector opportunities.

The absence of such capability means being squeezed out of bidding for the £44bn worth of government contracts that are let each year.

Apart from the compliance requirement, why move to the Level 2 BIM standard?  

Level 2 BIM enables a number of features, which, aligned with an effective business operating model, should create a competitive advantage for those operating in and supporting built assets in both the public and private sectors. Notwithstanding the regulatory pressure, adoption in a market characterised by overheating and a less is more attitude should create positive commercial benefits by:

  • Reducing design risk through earlier identification and elimination of information inaccuracies - the level 2 model represents an integrated, central source of all project information.
  • Managing out gaps in scope and capex – the level 2 model can report level of project compliance with client work breakdown structures, design guides and specification limits.
  • Providing greater visibility of return on investment criteria – the level 2 model can connect design and schedule decisions from a totex (capex and opex) perspective.
  • Increasing the resilience of project data and record keeping – coding, labelling and data storage inherent in the model software can help facilitate greater collaboration and drive more rigour and discipline to deliver better project control.

Taking the next step

Below we have set out 5 key focus areas to aid BIM implementation and assist when moving through to level 2 compliance.

1. Define the level of maturity of the delivery organisation and agree the success criteria for the project

The information model is an enabler but can only be successful if the leadership and organisational capability is in place to drive its implementation.

2. Work out where you are starting from information wise and lead from the front

Record and communicate the information model standards clearly in a set of Employer Information Requirements (EIR).

The EIRs are a vital element for project BIM implementation. The EIRs should clearly define standards and the outcome the owner/operator expects.

3. Invest in the right software

There are a number of solutions on the market. The better solutions offer flexibility, a best of breed arrangement - where software can be integrated and tailored to match the owner’s existing technology investment.

4. Adopt BIM and make it “Business as Usual”

Ensure the project team are fully aligned to create a model that includes the required information. Don’t forget to regularly check this is being done along the way.

5. Don’t just look at the model as a tool to build, consider fully its operational benefits to the operator and owner

The information model is there to benefit the asset owner or operator in the long term. The model needs to have integrity to be credible and not merely used as repository for a 3D design or to load O&M manuals. All participants need to be trained to utilise the full model functionality.