You might not have heard of Mark Reynolds, but his company, Mace Construct, has helped create some of the most famous buildings on the planet.
The Shard, the London Eye and the redeveloped Battersea Power Station draw crowds to the banks of the Thames.
Looking at a glinting, ultra-modern edifice like The Shard, it is hard to believe Britain’s construction industry is in the grip of a productivity crisis worse than the 1970s.
Mace, however, has published research which reveals the industry is a fifth less productive than it was 50 years ago – an era blighted by strikes and union militancy.
Productivity has been in the headlines because the Office for National Statistics admitted what appeared to be dire performance might not be quite so bad as it seemed. Even so, productivity growth since the financial crisis has been anaemic.
The Mace research is based on its own evidence and suggests the productivity gap in construction is much wider than in other sectors – so much so that it poses a ‘threat to national growth’, says Reynolds.
Looking at The Shard, it is hard to believe Britain’s construction industry is in the grip of a productivity crisis worse than the 1970s
Why are things worse than 50 years ago?
So was he shocked that the situation is worse than 50 years ago?
‘Yes and no. I went back and looked at productivity in the 1930s, the time of the building of the Empire State Building and the Chrysler Building.
‘That was probably the most productive time for the industry, but health and safety were pretty poor. We are at a tipping point.
‘Digitisation and automation through robotics give us the opportunity to drive significant improvement.’
But the industry is, he says, still some way from replacing brickies with bots.
‘Humanoids are not strong enough. The humanoid made by Chinese company Unitree can only lift about 2kg when we need it to lift about 25kg. Five years down the line it will probably be different.’
Mark Reynolds is the boss of Mace Construct
Productivity has been something of an obsession for Reynolds since he and a group of Bovis executives broke away from that firm to found Mace in the 1990s.
He was heavily influenced by analysis of the superior productivity of Japanese carmakers over their Western counterparts.
One reason productivity is poor, he says, is the churn among workers – itself a response to uncertainty over demand for labour.
There have been, he points out, no new reservoirs or nuclear power stations for decades, and housing is well below target.
The workforce has become more casual and fluid. Rather than being on a payroll, four out of ten construction workers are self-employed, as they move between sites, firms and trades.
Reynolds’ argument is that a more predictable pipeline and better project design would improve efficiency.
He says: ‘There are about £700billion worth of projects that could be built, such as reservoirs. You need long-term visibility on projects so you can train your workforce.’
Making it easier to get a cup of builder’s tea paid off
He points to some disarmingly simple solutions for improving productivity, such as making it easier to get a cup of builder’s tea.
‘On Heathrow Terminal 5 we moved the canteen from outside the site to inside. It took me nine months to convince the client that although it would cost £900,000, it would save us a huge load of time in productivity and progress. Time is absolutely crucial.
‘For every £100million project that is late, it costs us around £150,000 to £175,000 a week.’
Why is he making public the insights rather than keeping them to himself and giving Mace a competitive advantage?
‘I want productivity improvements to percolate through the industry. It is vital for attracting young people.’
As co-chair of the Construction Skills Mission Board, he is conscious that the industry has a rapidly ageing workforce.
‘There are around 2.1million people in the industry and around 950,000 are aged 50 or above. We need a pipeline of young people.’
‘A bricklayer has to be trained well. You want them to be laying 480 bricks a day, so they can be paid a proper wage and the employer can make money.’
But about half of the youngsters being trained are not getting jobs, because there aren’t enough around and not enough confidence to employ younger people.
Mace, which stands for Management and Consultant Engineering, is the second-largest construction group in the UK behind Laing O’Rourke.
In the spring, it completed a split of its building division, Mace Construct, from the consultancy side, Mace Consult.
Goldman Sachs, the US investment bank, bought a 75 per cent stake in the consultancy arm, where Reynolds remains as chairman, in a deal estimated at between £750million and £800million.
‘Why split? We always said we were better together. But when someone says you will be worth a lot more separate… we realised it was best for both,’ he says.
The building side will have access to projects from which it has been excluded due to perceived conflicts of interest in sectors like rail, aviation and nuclear.
Reynolds is the biggest individual shareholder. ‘Five of the six shareholders are over 60. We have to make sure the business goes on beyond us.’
He does not directly answer questions on whether that means a stock market float, but it sounds a distinct possibility.
He says: ‘Never say never. Whether we float or not, we want to be as investable as possible.
‘I love this business. What other industry gives you the chance to create something people could talk about for millennia?’