The Nature of the Manufacturing and Construction Industry in the UK.
This essay examines the Manufacturing and Construction Industry between 1990 and 2014. It compares data about its historic composition, current nature, its contribution to the UK economy, the types of work being ordered for construction and its financing methods.
Conclusions are then drawn from the data.
Historic Composition
In 1990 of an approx. workforce total of 28,120,000
Manufacturing and Construction employed 3,036,960 jobs. 10.8%
Of these approx. 30,000 were Architects. 9%
Source: CIA World Factbook 1990.
In 1991 of an approx. workforce total of 28,966,000
Manufacturing and Construction employed 8,023,582 jobs. 27.2%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 1991.
In 1992 of an approx. workforce total of 26,177,000
Manufacturing and Construction employed 6,544,250 jobs. 25%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 1992.
In 1993 of an approx. workforce total of 28,048,000
Manufacturing and Construction employed 7,120,144 jobs. 25%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 1993.
In 1994 of an approx. workforce total of 28,048,000
Manufacturing and Construction employed 7,120,144 jobs. 25%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 1994.
In 1995 of an approx. workforce total of 28,048,000
Manufacturing and Construction employed 7,120,144 jobs. 25%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 1995.
In 1996 of an approx. workforce total of 28,048,000
Manufacturing and Construction employed 7,120,144 jobs. 25%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 1996.
In 1997 of an approx. workforce total of 28,100,000
Manufacturing and Construction employed 7,025,000 jobs. 25%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 1997.
In 1998 of an approx. workforce total of 28,200,000
Manufacturing and Construction employed 4,935,000 jobs. 17.5%
Of these approx. 30,000 were Architects. 0.6%
Source: CIA World Factbook 1998.
In 1999 of an approx. workforce total of 28,800,000
Manufacturing and Construction employed 5,040,000 jobs. 17.5%
Of these approx. 30,000 were Architects. 0.6%
Source: CIA World Factbook 1999.
In 2000 of an approx. workforce total of 29,200,000
Manufacturing and Construction employed 5,110,000 jobs. 17.5%
Of these approx. 30,000 were Architects. 0.6%
Source: CIA World Factbook 2000.
In 2001 of an approx. workforce total of 29,200,000
Industry (Manufacturing and Construction) employed 5,548,000 jobs. 19%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2001.
In 2002 of an approx. workforce total of 29,700,000
Industry (Manufacturing and Construction) employed 7,425,000 jobs. 25%
Of these approx. 30,000 were Architects. 0.4%
Source: CIA World Factbook 2002.
In 2003 of an approx. workforce total of 29,700,000
Industry (Manufacturing and Construction) employed 7,425,000 jobs. 25%
Of these approx. 30,000 were Architects. 0.4%
Source: CIA World Factbook 2003.
In 2004 of an approx. workforce total of 29,600,000
Industry (Manufacturing and Construction) employed 7,400,000 jobs. 25%
Of these approx. 30,000 were Architects. 0.4%
Source: CIA World Factbook 2004.
In 2005 of an approx. workforce total of 29,780,000
Industry (Manufacturing and Construction) employed 5,687,980 jobs. 19.1%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2005.
In 2006 of an approx. workforce total of 30,070,000
Industry (Manufacturing and Construction) employed 5,743,370 jobs. 19.1%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2006.
In 2007 of an approx. workforce total of 30,400,000
Industry (Manufacturing and Construction) employed 5,806,400 jobs. 19.1%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2007.
In 2008 of an approx. workforce total of 30,890,000
Industry (Manufacturing and Construction) employed 5,621,980 jobs. 18.2%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2008.
In 2009 of an approx. workforce total of 31,230,000
Industry (Manufacturing and Construction) employed 5,683,860 jobs. 18.2%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2009.
In 2010 of an approx. workforce total of 31,450,000
Industry (Manufacturing and Construction) employed 5,723,900 jobs. 18.2%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2010.
In 2011 of an approx. workforce total of 31,900,000
Industry (Manufacturing and Construction) employed 5,805,800 jobs. 18.2%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2011.
In 2012 of an approx. workforce total of 31,900,000
Industry (Manufacturing and Construction) employed 5,805,800 jobs. 18.2%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2012.
In 2013 of an approx. workforce total of 31,900,000
Industry (Manufacturing and Construction) employed 5,805,800 jobs. 18.2%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2013.
In 2014 of an approx. workforce total of 32,070,000
Industry (Manufacturing and Construction) employed 5,836,740 jobs. 18.2%
Of these approx. 30,000 were Architects. 0.5%
Source: CIA World Factbook 2014.
Additional Source: Architects Journal. Are there too many architecture schools? 25 July, 2013 | By Jonathan Sergison
(Number of Architects in UK constant at about 30,000 since 1980’s)
Gross Value Added to the UK Economy
GVA is a measure of the values of goods and services produced in an area of the economy.
The total GVA (Gross Value added of the UK Economy) in 2014 was £1,340,000,000,000
Source: House of Commons. Regional economic output statistics. May 2014.
The industry in 2014 was formed of 3 sub-sectors.
The approx. number of jobs, businesses and GVA (Gross Value Added to the UK economy.)
per sector was.
Contracting, 2,030,000 jobs, 234,000 businesses, £63,000,000,000 GVA. 5% of total GVA.
Services, 580,000 jobs, 30,000 businesses, £14,000,000,000 GVA. 1% of total GVA.
(This sector includes the Architects)
Products, 310,000 jobs, 18,000 businesses, £13,000,000,000 GVA. Approx.1% of total GVA
Totals, 3 Sectors, 2,920,000 jobs, 282,000 businesses, £90,000,000,000 approx. GVA. 7% of total GVA.
Source:https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/210060/bis-13-958
-uk-construction-an-economic-analysis-of-sector.pdf
This averages out at 10 people per business with a GVA per person of approx. £31,000 and a GVA per business of approx. £320,000
Architecture sector GVA as a Comparison.
In 2014 there were approx. 30,000 Architects.0.5% of the Construction labour sector.
In 2013-2014 a survey of approx.2,100 architects practices, 23,500 architects established that the Architect sector of Manufacturing and Construction in the UK had a turnover of £1,580,000,000.Source: BD Online Is architecture a tale of two professions? 18 April 2013 | By Richard Brindley
This averages out at 11 architects in each practice.
If the turnover of £1,580,000,000 is considered as a GVA then this can be seen as
1.8% of the total construction GVA in 2014.
This equates to a GVA of £67,234 per Architect.
This equates to a GVA of £752,380 per practice.
Source: Is architecture a tale of two professions? 18 April 2013 | By Richard Brindley Bd online.
The Types of Project being Ordered.
Considering the Public housing, Private Housing, Infrastructure, Public Non-Housing, Private Industrial and Private Commercial sectors and then comparing them the results per year were.
From 1997 to 2004 the largest sector was private commercial.
From 2004 to 2006 the largest sector was private new housing.
From 2006 to 2009 the largest sector was private commercial.
From 2009 to 2012 the largest sector was private commercial.
From 2012 to 2013 the largest sector was infrastructure.
From 2013 to 2014 the largest sector was all new housing.
Source: ONS G - New Orders Q3 2014 CVM Timeseries
Financing Methods
No business is independent in the UK economy. All interact to increase their workload potential and profit
The purpose of business is to prosper by obtaining and holding for as long as possible part of the money supply.
All profits, working capital, are re-invested to increase the potential of the business.
All of the money supply therefore in the economy is financed by the flow of Tax money.
The workforce therefore creates its own employment, capital and tax potential.
The Standard Business Finance Model.
The standard general business finance model is based on Capital input and re-investment.
Capital is regarded as an overall estimation of a business asset potential, what the business can do with money. This is expressed generally in the following terms.
Current Assets / Current Liabilities = Working Capital
This can then be assessed by the following ratios.
If Working Capital = 1 Then there is enough capital.
If Working Capital = -1 Then there is not enough capital.
If Working Capital = 1.2 to 2 Then there is potential capital as investment.
If Working Capital = 2 + Then there is lack of investment in company assets.
The Construction Industry Business Finance Model.
In the Construction Industry interdependency is massively extended through materials, plant and work in progress over fixed timescales, with external contracting suppliers, manufacturers, distributers, trades and small sub-builders.
This extension can be seen in the breaking down of the Construction Finance Model.
Working capital I = Stocks & work-in-progress (WIP) + trade debtors – trade creditors – accruals.
This breaks down further to
Current Assets / Current Liabilities = Shares in a company as funds + Long term liabilities (debentures, loans, deferred tax liabilities and pension obligations) = materials, plant and work in progress over fixed timescales, with external contracting suppliers, manufacturers, distributers, trades and small sub-builders + trade relationship with external contracting suppliers, manufacturers, distributers, trades and small sub-builders, persons, countries or organizations that owes money – trade relationship with external contracting suppliers, manufacturers, distributers, trades and small sub-builders, person, countries or organizations to whom money is owing - accounts payable from all, accounts receivable from all, saleable assets arising from the reputation of a material, plant, external contracting supplier, manufacturer, distributer, trade, small sub-builders business and its relations with its customers, future tax liability and future interest expense with materials, plant and work in progress over fixed timescales, with external contracting suppliers, manufacturers, distributers, trades and small sub-builders, short term bank loans and overdrafts, short term tax liabilities, PAYE, NI deductions or VAT not yet paid over, current liabilities, nonbank loans, group and directors loans, and hire purchase and leasing liabilities, premises rents, mortgages, storages area costs, ecological costs, carbon costs, tendering costs, EU tendering costs and timescales, approval cost and timescales, licensing costs and timescales and future marketing costs.
Conclusions.
The number of employees in the manufacturing and construction industry has varied between 1990 and 2014.
The current number of manufacturing and construction employees is back to 1990 levels.
The total number of Architects has remained the same from 1990 at approx. 30,000.
In relation to the total working population numbers Manufacturing and Construction is currently a minor, declining sector in the total workforce.
In relation to the total working population numbers Architecture is currently a very minor, stable, component of the Manufacturing and Construction workforce.
The three sectors of the Manufacturing and construction industry are currently minor contributors to the total GVA of the UK economy.
The Product sector of the Manufacturing and construction industry leads over contracting and services sectors. The industry is therefore product lead. This indicates a pre-designed, prefabricated, mass production nature to the industry.
This nature is in direct contradiction to the nature of production of Architecture.
It is however the nature of mass building driven not by need or aesthetics but by want, desire, prestige and investment.
The GVA in the Architecture sector is higher than the personal or business GVA of the Manufacturing and Construction industry sectors.
This appears to be due to the Architecture sector being focused in fewer businesses.
The GVA in the Manufacturing and Construction industry is spread over 134 times the number of businesses compared to Architecture.
The Types of Construction being Ordered indicates that despite an extensive knowledge of construction methods, mass product production and opportunity to build any form of building the industry has been focused onto private commercial, infrastructure and housing.
This focus of work is likely to be due to the constraints of economics rather than need and aesthetics.
Construction has tried to generate its own work in the future by directly linking itself to renewable but short duration products and materials that require a complete rebuilding of structures rather than retrofitting over old, outdated forms. This method however will not last due to the depletion of energy, resource, environments and the effects of climate change.
Communications Technology is also making the office, the retail store, the leisure centre, the service industries redundant in favour of a total domestic, house based life for the population and reducing the workload potential of the industry.
The construction finance model does not work for any of the sectors in the industry.
It adapts, focuses on specific goals in a timescale and then concentrates on the next task to maintain a working capital.
It uses an unfocused approach to ensure that the capital is obtained and used at the right amounts at the most appropriate and profitable moment.
The manufacturing and construction sector needs to simplify its nature and reduce its interdependency.
The workforce must understand that it creates its own employment, capital and tax potential.
The complexity of the construction industry causes it to be very energy intensive and high in greenhouse gas emissions and so it is the major contributor to climate change.
Despite failings Manufacturing and Construction are fundamental components to a society.
They provide artefacts and locations for the expression of the culture, its appreciations of beauty, its qualities, its values and its needs.
Considering all of these issues Manufacturing and Construction should therefore only be carried out when absolutely necessary to ensure that energy, resources, environment, tax money and capital are used effectively as a response to a society’s needs.
Ian K Whittaker
Websites:
https://sites.google.com/site/architecturearticles
Email: iankwhittaker@gmail.com
24/02/2015
14/10/2020
2244 words over 6 pages