Another challenging but interesting year ahead in 2018

With infrastructure increasingly being seen by the government as a key driver of economic prosperity, 2018 is likely to be just as interesting - and challenging - as the previous 12 months.

Andy Walker
23 January 2018

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2018 forecast

There’s no doubt that 2017 will go down as one of the more eventful years for the infrastructure sector. The industry was rarely out of the headlines, with the government at last seeing infrastructure as key to driving economic and social progress. 2018 promises to be another interesting year, full of challenges as the government continues to grapple with Brexit, but also opportunities.

An ongoing concern in 2018 remains the infrastructure pipeline, especially its funding. “A big area of concern for me is the inconsistency in the UK’s pipeline of projects in terms of funding and procurement timelines,” says Lara Poloni, chief executive of Europe, Middle East, India and Africa at AECOM. “This in turn can affect business’s ability to ensure they have the correct resources at the right time,” she said.

In Northern Ireland, despite the £1bn handed over by Theresa May’s government in return for the support of the Democratic Unionist Party, with the assembly remaining suspended there are challenges ahead. Stuart MacKenzie, chair of ACE Northern Ireland and JCP Consulting director, said: “With no assembly there is no ‘Programme for Government’ and therefore no budget set by MLAs (assembly members). However, the secretary of state has released funds to enable the industry to develop and grow.  

MacKenzie sais that despite Brexit and the lack of local government in Northern Ireland there has been a continued upturn of work throughout the industry over the past year. “Opportunities for inward investment exist and both major infrastructure and capital development projects have been issued,” he said. ACE was at the centre of discussions, representing members in Northern Ireland in debates around the construction sector, however “without representation from our MLAs it is a challenge to influence the local agenda at the level of local government,” he said.

According to Ramboll’s UK managing director Mathew Riley, Brexit would continue to cast a shadow over the industry in the year ahead. “It would be easy to criticise this government for a lack of progress on vital issues such as housing, additional runway capacity in the south east etc, but they are going to struggle to make critical decisions in 2018 in the face of Brexit,” Riley said.

Nelson Ogunshakin, chief executive of the Association for Consultancy and Engineering, was also concerned about Brexit. “I worry that the continued focus on Brexit is impacting the ‘day-to-day’ work of government. It is for this reason that ACE will continue to engage on behalf of its members, making sure that infrastructure is not set aside to be discussed at an undisclosed date in the future and that the important work continues on delivering our national project pipeline,” said Ogunshakin.

Mathew Riley said that the industry needed to step up and help the politicians. “We need to help the policy makers by addressing the number one industry challenge – productivity,” he said. “We need to use the Construction Innovation Fund to demonstrate our ability to step up and play our part in delivering smart and efficient solutions - and start to do so this year! This will be tough ask when you look at the financial issues facing some members of the supply chain. However, now more than ever we need to collaborate to provide the evidence of reform, to make investment in our infrastructure more affordable, and to show how dynamic our industry can be to retain and attract the best talent,” said Riley.

Lizi Stewart, head of highways and aviation at Arcadis, agrees with Riley on the productivity issue. “The UK is still facing a massive productivity challenge and although the role that infrastructure can play in stimulating a lagging economy has long been recognised, in 2018 we can expect to see increasing pressure being placed on our industry to do things differently,” said Stewart. 

“In this respect, I think we can expect to see the Infrastructure Client Group’s ‘Project 13’ really come to life. Our industry is increasingly ready to embrace change and the race to the bottom - certainly in terms of costs - is a thing of the past. In 2018 we’re going to see more emphasis being placed on how we manage projects to derive maximum long-term value and the challenge for the industry will be in how we can ensure this approach is firmly embedded in delivery,” Stewart said.

AECOM’s Lara Poloni highlighted skills as a key challenge for 2018. “Attracting and developing a diverse range of people from a variety of backgrounds is vitally important to the industry. The government, industry and schools need to be smarter at tapping into the engineers of the future whilst developing those already employed to ensure we have a workforce that is fit for the future. At AECOM we’ve invested heavily in digital; we know that we need to be fit for the future which means our workforce need to be empowered and enabled to meet that challenge.”

Steven Trewhella, director Rivelin Bridge and chair of the ACE/EIC water group, said investment would remain a challenge in the year ahead. “Water challenges, ‘too little’ and ‘too much’ will remain an investment priority in the UK and internationally,” he said. “Cross-sector collaboration presents a growing opportunity and imperative in 2018 to accelerate investments and unlock the potential of service-product-software combinations to bring forward new ways of doing things and new value. As ever the challenge will be to design solutions sensitive to future risks and opportunities,” Trewhella said.

Lizi Stewart also highlighted technology as a key driver for the year ahead. “Current emerging technologies, from artificial intelligence and virtual reality to 3D-printing and the use of big data, are all going to play a major part in how we operate. However, the real challenge for the industry is going to be keeping up with the pace of change. 

“Construction is one of the last industries to be digitally disrupted and, if we’re to meet future consumer and client demands, we can’t afford to be left behind. There could be a very real threat of digital specialists starting to move into the construction space, and the industry needs to wholeheartedly embrace the digital agenda if it’s going to stay relevant in future,” said Stewart.