CIOB report calls for rethink of UK construction environment

The Chartered Institute of Building (CIOB) has published a new report calling for a fundamental rethink of the business environment in which the UK construction industry operates, warning that volatility, skills shortages and high insolvency rates are undermining the sector’s long-term capacity.

Titled Capacity Constraints in Construction: Rethinking the Business Environment, the report was produced with economist Brian Green and examines the structural challenges preventing the industry from meeting demand for new homes and infrastructure. It argues that frequent boom-and-bust cycles have forced firms to operate defensively, limiting investment in skills and productivity improvements.

Green said: “Construction is regarded as the most volatile major sector of the economy and repeatedly faces capacity challenges. Rather than forcing change upon firms, this report suggests we should look to change the environment within which they operate. Reducing volatility and improving the institutional framework would allow businesses to adapt naturally and perform more efficiently.”

The report shifts focus from short-term fixes to long-term stability, highlighting that hundreds of construction firms collapse each year despite government growth ambitions. It suggests policymakers must prioritise reforms that reduce uncertainty in project pipelines, strengthen data and decision-making frameworks, and encourage sustainable investment across the supply chain.

David Barnes, head of policy and public affairs at CIOB, said: “The UK Government’s 1.5 million new homes target has faced scrutiny over whether the sector can deliver. This report aims to move the conversation beyond targets to address the deeper structural issues that make construction volatile and unstable.”

Industry leaders have backed the report’s findings. Professor Noble Francis, economics director at the Construction Products Association, said it “rightly highlights how the government can help reduce volatility in the sector,” while CITB research strategy lead Lee Bryer described it as “a more systemic, empathetic, and potentially more productive perspective” on how to deliver lasting change.

CIOB hopes the report will prompt policymakers and industry leaders to work collaboratively on reforms that make the sector more resilient, progressive and productive.