UK construction productivity crisis: what the Mace Construct report means for your business
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UK construction’s productivity crisis, explained
The UK construction industry won’t be automated out of existence, but UK construction productivity remains a serious problem that is costing the economy billions. That is the central argument from the leadership of Mace Construct, the contracting arm of Mace Group, in a new report published in April 2025 that draws on data from more than 200 projects across the sector.
What the “Build Smart, Build Better” report actually found
Mace Construct’s Build Smart, Build Better report sets out in stark terms what workforce instability costs the industry. On projects employing around 500 workers, high-churn workforces lose an estimated £2,266 in output per hour. Scale that up to a project with around 2,000 workers, and the figure rises to almost £20,000 per hour in lost output.
Across the sector, Mace estimates that workforce turnover is costing UK construction more than £1.3 billion a year in lost productivity. The report argues this stems from disrupted knowledge, broken team coordination, and the loss of continuity when operatives move between sites and employers at high rates.
The headline finding for the wider economy is significant: Mace calculates that over £67 billion across the UK’s infrastructure pipeline could be saved if the sector addresses its productivity shortfall. On sites with more than 500 operatives, high-churn workforces produce 8% less gross-value-added per hour than stable, consistent teams.
Why automation isn’t the answer on its own
The Mace Construct position is a deliberate pushback against the assumption that technology will resolve the industry’s efficiency gap automatically. Robots and automation have a role to play, but they don’t address the structural reasons why productivity is lost in the first place.
One of the report’s more counterintuitive findings is that productivity outcomes are largely determined before construction even begins. The design and planning stage sets the conditions for how efficiently a project will run, and well-structured projects see both productivity and sustainability improve together. Pouring technology onto a poorly planned project won’t fix what was broken before the first brick was laid.
For small contractors and subcontractors, this is worth sitting with. The efficiency conversation in construction often centres on equipment, software, and site processes. Mace’s data suggests the upstream decisions, who is employed, on what terms, and how projects are scoped and handed down the supply chain, matter just as much.
The government’s response and the skills gap
The report arrives at a moment when public investment in construction is scaling up considerably. The government has committed hundreds of billions of pounds towards housing, transport, energy, and social infrastructure over the coming decade. Chancellor Rachel Reeves has announced a £600 million government investment in the sector specifically to train up to 60,000 more workers by 2029.
Mace Group’s Executive Chairman Mark Reynolds has been appointed to co-chair a new Construction Skills Mission Board, which is intended to provide strategic leadership and drive collaboration across the industry on the training and workforce challenge. The Board’s creation reflects how seriously the government is treating the skills gap as a structural barrier to delivering its infrastructure ambitions.
Construction pay growth was running at 5.9% as of April 2025, a sign that the competition for skilled workers has been intense. There are, however, early indications that the labour market may be starting to loosen, with a drop in vacancies and payrolled employees that is likely connected to the rise in employer National Insurance contributions introduced in the Spring.
What Mace is calling for
The report does not stop at diagnosing the problem. Mace Construct makes a series of practical recommendations aimed at changing how major contracts are structured and awarded. The central ask is that clients scoring bids for large contracts should factor in direct employment ratios and apprenticeship commitments, not just price and programme.
The report also calls for cross-project labour pools to become standard practice on state-funded schemes, so that skilled workers move between projects within a stable employment framework rather than being repeatedly laid off and re-hired. Mace has committed to becoming the UK’s most productive major contractor by 2030 and is calling on other large contractors to follow its lead in measuring and publishing their own productivity data.
Publishing that data is itself a significant step. Productivity in construction is rarely tracked consistently or disclosed publicly, which makes it difficult for clients, government, and the supply chain to hold prime contractors accountable for efficiency.
What this means for you
If you run a small construction business, a specialist subcontractor, or a trade company working within larger supply chains, the Mace report points to pressures that are already affecting your day-to-day. Labour costs are rising, skilled workers are harder to retain, and the contracts you win through larger frameworks may increasingly come with expectations around employment practices and apprenticeship commitments.
The £600 million government training fund is a practical opportunity worth watching. If 60,000 new workers enter the sector by 2029 through structured training programmes, that changes the availability and cost of labour on the smaller end of the market too. Whether that relieves wage pressure or simply meets demand from a growing infrastructure pipeline depends on how well the programmes are targeted.
The bid-scoring proposals are also worth paying attention to now, before they become standard. If direct employment ratios and apprenticeship commitments become formal criteria on publicly funded contracts, businesses that have not invested in those areas may find themselves at a disadvantage when frameworks are next tendered.
Verdict
The Build Smart, Build Better report is a detailed, data-grounded argument that the UK construction industry’s productivity crisis is structural, not technological. Mace Construct’s prescription, stable workforces, better upstream planning, and procurement reform, won’t be quick or simple to implement. But the scale of the infrastructure investment the government is committing to means the sector has both the incentive and the opportunity to do things differently. For anyone working in or around construction, the direction of travel on employment practices, training investment, and productivity measurement is becoming clearer. Getting ahead of it now makes more sense than waiting for it to become a contractual requirement.
Frequently asked questions
What is the Mace Construct “Build Smart, Build Better” report?
It is a research report published by Mace Construct in April 2025, drawing on data from more than 200 projects. It argues that high workforce turnover is costing the UK construction industry more than £1.3 billion a year in lost productivity, and sets out recommendations for how contractors, clients, and government can address the problem.
How much could the UK save by improving construction productivity?
Mace estimates that over £67 billion across the UK’s infrastructure pipeline could be saved if the sector tackles its productivity gap, based on the analysis in the Build Smart, Build Better report.
Why does workforce churn hurt productivity so much on construction sites?
When workers move between sites and employers frequently, teams lose continuity, coordination breaks down, and knowledge built up on a project disappears. On large sites, this translates into measurable hourly output losses, rising to almost £20,000 per hour on projects with around 2,000 workers.
What is the Construction Skills Mission Board?
It is a new body set up to provide strategic leadership on workforce training and skills development across the construction sector. Mace Group’s Executive Chairman Mark Reynolds has been appointed to co-chair it, alongside government representation, as part of the broader response to the industry’s skills gap.
How might the government’s £600 million training investment affect small construction firms?
The funding is aimed at training up to 60,000 more construction workers by 2029. If successful, it could ease the competition for skilled labour over the medium term, though whether that translates into lower wage pressure or simply meets demand from a growing pipeline of public infrastructure projects remains to be seen.
The scale of what the government is committing to build over the next decade means the sector cannot afford to keep losing billions to avoidable inefficiency. The Mace report puts numbers on a problem that most people working in construction already feel, and that conversation is only going to intensify.
