Construction Education Supply in the United Kingdom

ASC Proceedings of the 41st Annual Conference
University of Cincinnati - Cincinnati, Ohio
April 6 - 9, 2005


Construction Education Supply in the United Kingdom

Melvyn A Lees BSc(Hons) Dip Arb FRICS ILTM and Allan Ashworth – MSc MRICS ILTM
University of Salford
United Kingdom

This paper presents the findings of a study that investigated the extent to which the supply of new recruits to the United Kingdom (UK) construction industry can be considered a market that responds to normal market pressures. The focus is on higher education and the recruitment of new professional employees to the professions associated with construction. The paper sets out the historical background and context to UK construction education identifying a strong tradition in part-time education that was overtaken by full-time provision by the early nineties. This full-time provision has been in decline throughout the nineties. As a result, there has been a resurgence in the amount of part-time study. The paper establishes a definition for education supply and then calculates the pressure of demand on the supply of part-time new recruits. It concludes by identifying a strong positive correlation that can be used in developing predictive models of future demand for construction education.

Key Words: Education supply, full-time, part-time, pressure of demand


Introduction

This paper presents the findings of a study that investigated the market for higher education in the subject area of construction in the United Kingdom. It sets out the background and context to the investigation and provides a definition of education supply. It explains the methodological approach taken and examines the effect of pressure of demand on the supply of new recruits. Finally, conclusions are made that may be useful in developing a predictive model for the size of future recruits into construction education.

Background and Context

Construction is a significant sector in the economy of most countries, representing on average 8% of GDP. The amount that a country spends on construction is closely related to its income. In 1998, expenditure varied from US$5 per head in Ethiopia to almost US$5,000 in Japan. This means that construction output, by value, is heavily concentrated in the rich, developed world. The high income countries of Europe are responsible for 30% of global output, the United States for 21% and Japan for 20%. China, despite its huge size and rapid economic growth in recent years, lags a long way behind with only 6%. India has 1.7% (International Labour Organization, 2004).

The distribution of construction employment is almost the exact reverse of the distribution of output. While three-quarters of output is in the developed countries, three-quarters of employment is in the developing world. Official data (International Labour Organization, 2004) suggest there are around 111 million construction workers in the world, some 80 million of them in the low and middle income countries. Clearly, the developed countries use more technology and higher level skills in construction to generate higher levels of output with fewer people. This means that there should be a close correlation between output in the sector and the demand for new recruits, and, therefore, new graduates from construction related programs.

Growth in construction activity has been consistent during the 1990’s and early 2000’s. A recent study by Crosthwaite (2004) shows strong growth projections for the construction sector. The projected growth for the period 2003 to 2007 is 4 % in the United States is 4% and 5% for the United Kingdom.

In the UK, output from the construction sector has risen by 23% in real terms in the period 1994 to 2002 (see figure 1). In the US, a similar pattern exists and while Europe and the Pacific Rim areas have not shown quite the same consistency of growth, output is now significantly higher than in the early 1990’s. The global market for construction has shown strong growth over the past decade and is predicted to continue growing in the medium term.

Figure 1: UK Construction Output


The State of Construction Education

Bilbo et al (2000) concluded that “construction programs are not meeting the current demands of the construction industry [in the US] and it is unlikely that this fact will change in the projected future”. This conclusion was drawn because while there was consistent growth in construction activity, the supply of new graduates was expected to remain static.

The position in the UK is, in many respects, worse than that in the US as here the supply of new graduates from full-time programs has almost halved in the period 1994 through to 2003 (see figure 2). Byfield (2001) and Cavill (1999) recognized the decline in graduates and Ross (2001) predicted the closure of schools in the UK as a consequence. There is still a substantial shortfall in the supply of new recruits to industry at all levels (CITB, 2002). Most full-time graduates in the UK can make a choice from anything up to five employment offers. Moreover, not all construction graduates are retained in the industry as some of those job offers come from other industries such as management consultancy and finance where the knowledge and skills of those with construction qualifications have been recognized and rewarded at a higher level.

This shortage of new graduates impacts on industry recruitment costs. There is anecdotal evidence that the recruitment costs to industry are increasing in a disproportionate way. It is now commonplace that the money paid to recruitment consultants in order to secure an appointment is equivalent to 40% of the annual salary of the new recruit. Worse still, companies struggle to retain the staff they secure, with the very agencies employed to recruit staff being the source of the problem as they will maintain a relationship with the new recruit and inform them of alternative job offers when they become available.

Figure 2: UK Full-time graduates



When viewed from the industry perspective, it is clear that there is a market for new recruits into professional level employment. It is also clear that at present the demand for new recruits is very strong when compared to the supply. The question that follows from this is what impact does this excess of demand over supply have on the higher education sector for construction? Before this can be examined more fully, it is important to consider how construction education, at the higher levels, developed in the UK.

The Role of the Professions

Construction education in the UK is dominated by professional institutions that were created to set and monitor standards of professional competence for the benefit of society in general. Most of the main construction disciplines have their own institution – architects have the Royal Institute of British Architects; civil engineers have the Institution of Civil Engineers; construction managers have the Chartered Institute of Building; and surveyors have the Royal Institution of Chartered Surveyors. There are more than nineteen professional bodies that have some involvement with construction. They all set standards for admission as members and those who qualify for membership in the more prestigious institutions attain ‘chartered’ status and can call themselves a chartered architect, a chartered surveyor and so on. For some professions, such as architecture and engineering, it was not possible to practice without registered status, which could be conferred by the appropriate institution. Most of these organisations can trace their origins back over two hundred years to royal charters approved by the Privy Council. They form part of the establishment in the UK and most now have substantial memberships and significant assets, often in the form of property in London near to Government. While they retain their roles as custodians of standards and professional competence, they have more recently become lobby groups seeking to advance the standing of their own members.

The tradition of education in the professional institutions was that of articles. To be articled is the professional equivalent to an apprenticeship, where a novice would be attached to a master and would serve time learning the skills necessary to become craftsmen. Essentially, this form of education was part-time and took several years. The trainee engineer or surveyor would work with their mentor and study in their own time, usually being allowed a day away from work at a local college. Ultimately, they would apply for membership of their chosen institution by taking that institution’s external examinations. If they were successful, they were admitted as a member and acquired chartered status.

Construction education continued in this form until the mid-twentieth century when the professional institutions started to accredit new full-time programs in universities and colleges. However, construction education came late to universities. There were few programs in construction management before 1950 and those that did exist where generally options within some other major discipline such as architecture or engineering. The first independent schools of construction can be seen developing though the late 1960’s and into the 1970’s. The majority of these schools are located in the newer universities that received incorporation in 1992.

To summarize, the tradition for construction education in the UK was part-time and has only become predominantly full-time in the last fifty years with many universities still running part-time versions of their full-time programs.

This tradition of part-time education is important in explaining some of the changes that can be observed that have compensated for the shortage of new graduate recruits into the industry:


Statement of the Problem

The main problem is that the supply of new recruits to industry does not appear to be keeping pace with the growth in output. There is a growth in part-time study that would appear to be compensating for the reduction in the number of full-time graduates. The hypothesis is that there is a market for part-time study that responds to normal market conditions. To test this, an examination of the education supply and how it is affected by demand is necessary.


Method

The aim of this study is to investigate whether there is a market for construction education, where the demand for new recruits affects the supply. In order to satisfy this aim, certain objectives will need to be achieved:

Establish a satisfactory definition for education supply taking account of different modes and level of study.

Identify the demand for new recruits over time

Identify the education supply of new recruits through time

Observe and test whether there is any relationship between the demand and education supply.


A working definition of education supply is developed through argument from the review of context and literature for objective 1; a desk study of the published statistics provided the data for objectives 2 and 3; and analysis and statistical testing were employed to achieve objective 4.


Results

Education Supply

Figure 1 shows strong growth in construction activity. Government reports have indicated strong growth in construction employment since 1995 (DTI, 1997 and 2003) and it is reasonable to assume that the number of people employed in a professional capacity has also grown more or less in line with activity. Given the picture for full-time graduates, it is clear that these new recruits must have come from other modes of education. It is reasonable to assume that these other recruits have come from the other sources listed above – namely, part-time undergraduate and postgraduate courses.

The next issue to consider is when does a part-time student become a new recruit to industry? Most part-time undergraduate programs are five years long with part-time postgraduate courses being typically two years in duration. With full-time programs, students become a new recruit at the point of graduation and they take up their first employment in the industry. However, for part-time students, measuring the number of graduates would be inappropriate as almost all students will have been employed and working in the industry for some years. For the purpose of this study, part-time students are deemed to be new recruits to industry at the point at which they commence their studies.

This means that the education supply in any given year can be calculated as the total number of full-time completions (graduates) plus the number of part-time commencements (new starts).

The Desk Study

The desk study looked at sources of information for the number of graduations and commencements in construction education. In the UK, there are two main official sources of such information – the Universities and Colleges Admissions Service (UCAS) and the Higher Education Statistics Agency (HESA).

UCAS is responsible for handling all university and college applications. It publishes annually and at more regular intervals on the progress of university and college recruitment. These reports provide an up-to-date picture of the level of applications. However, its main focus is on undergraduate full-time education and while it tracks applications to the point of acceptance, it does not maintain an accurate record of the number of students that actually register.

HESA has a different function and role. Its remit is to be ‘the central source for higher education statistics’ and it has standardized and streamlined the data collection and publication process to become a respected point of reference (HESA 2004). It is used by Government to assess the correct allocation of higher education funding for universities and colleges. HESA collects data from universities and colleges and publishes reports on an annual basis, but the data is up to two years behind, due to the need to analyze and verify the returns from institutions. Given the stronger and wider base from which the HESA data is sourced, the desk study was conducted using HESA data, notwithstanding that this meant that the latest data available was that for 2002.

Table 1 Education Supply - number of new recruits to construction industry
Nr of UK students in each category in each year	1995	1996	1997	1998	1999	2000	2001	2002
Full-time completions
Sub-degree	839	862	638	440	395	310	313	250
Undergraduate	3153	3324	3097	2738	2569	2166	1996	1894
Postgraduate	96	112	132	147	322	329	323	256
Total – full-time	4088	4298	3867	3325	3286	2805	2632	2400
Part-time commencements
Sub-degree	1138	917	947	1062	1080	1350	1645	1665
Undergraduate	1131	1116	1280	1576	1410	1435	1420	1290
Postgraduate	738	686	742	826	910	1035	1273	1135
Total – part-time	3007	2719	2969	3464	3400	3820	4338	4090
Total	7095	7017	6836	6789	6686	6625	6970	6490
Source: HESA


The study collated information on the subject area of K200 – Building; this includes construction technology, construction management, building, building surveying, quantity surveying (cost engineering) and construction project management. The data was collected on the two main modes of study – full-time and part-time – and at three levels of higher education – undergraduate, postgraduate and other sub-degree. In England and Wales, higher education is defined as post-secondary school education and normally is for students with a minimum age of 18. First degrees typically involve three years full-time study and masters programs normally one year of full-time study. In addition to these there are a number of sub-degree programs, which focus on technician level education and are usually of two years duration. Since this is an important part of construction education in the UK, data on these were included in the study. A summary of the results of this investigation is shown in Table 1.

Discussion and Analysis

The first stage of analysis is to convert the data for education supply and construction output into indices with a common base point. This will allow direct comparison and the construction of graphical representations that will aid interpretation. The education supply indices were constructed on the values given in Table 1. The Full-time Completions Index is, therefore, calculated by setting the value in Table 1 for the year 1995 as 100 and then determining the index for subsequent years as a ratio of the values. The Part-time Commencement Index and Education Supply Index were constructed in the same way.

Table 2 shows the indices constructed from the data in table 1 together with the Construction Output Index taken from the Department of Trade and Industry published reports (DTI 2004).

Table 2 Construction Output and Education Supply Indices with Pressure of Demand
Index for each year (1995 = 100)	1995	1996	1997	1998	1999	2000	2001	2002
Construction Output	100.0	105.0	108.1	110.3	112.5	113.0	116.2	121.8
Full-time Completions	100.0	105.1	94.6	81.3	80.4	68.6	64.4	58.7
Part-time Commencements	100.0	90.4	98.7	115.2	113.1	127.0	144.3	136.0
Education Supply	100.0	98.9	96.3	95.7	94.2	93.4	98.2	91.5
Pressure of Demand	0.0	-0.1	13.5	29.0	32.1	44.4	51.8	63.1
Source: HESA and DTI


The relationship between these indices is also shown graphically in Figure 3.

Table 2 also includes a measure of the pressure of demand. Pressure of demand is a term in economics that expresses the difference between the demand for a commodity and its supply. It is often used to explain changes in prices and to forecast likely inflation levels. In this study, the pressure of demand has been calculated as the difference between the Construction Output Index and the Full-time Completions Index. The reason for this is that the education supply has two components; one which cannot be directly affected by the level of output in construction sector and one which could be. Full-time graduates effectively make their decision to join the construction industry some four or five years prior to the point where they become employed for the first time. This means that the number of graduates cannot react to market conditions in the construction sector that pertain in any particular year. However, the number of new recruits through the part-time route could well be affected by the level of activity. The pressure of demand should correctly be calculated by looking at the difference between demand and the fixed component of supply – the Full-time Completion Index.

Pressure of Demand

The next stage in the analysis is to examine the strength of the relationship between pressure of demand and the flexible component of education supply – part-time commencements. If construction education follows the principles of a market, then there should be a strong correlation between these two variables; with pressure of demand being the independent variable and part-time commencements being the dependent variable. Figure 4 shows a linear correlation plot for these variables. The strength of the relationship was tested using Pearson’s correlation coefficient and the returned r² value is 0.9474. This would indicate that the null hypothesis that there is no relationship between pressure of demand and part-time commencements should be rejected. Furthermore, the value suggests a strong positive correlation.

Figure 3: Construction Output and Education Supply Indices

Figure 4: Correlation of Pressure of Demand with Part-time Commencements




Conclusions

The aim of this study was to investigate whether there is a market for construction education, where the demand for new recruits affects the supply. The conclusion is that there is a market and that this market responds by expanding and contracting the amount of part-time education supply in response to the pressure of demand. The value of this finding is that it will allow a model of demand for different modes of study to be constructed and tested against a variety of scenarios for construction output and full-time completions. This will inform the policies for recruitment in companies and practices and aid the planning of schools of construction, who will be able to look at medium and long-term trends for the first time.

As with all studies of this type, several assumptions and approximations were employed in order to conclude the research. These include:

	The assumption that all new part-time program commencements are new recruits to industry. Some students may progress from one program to another and be counted twice. The extent to which this is a problem needs to be investigated, but it is not considered significant at this stage and does not invalidate the findings.
	The assumption that those people entering the industry from other disciplines always undertake some form of construction education. This may not be true and needs to be investigated, but it is not considered significant at this stage and does not invalidate the findings.


References

Bilbo, D. Fetters, T, Burt, R. and Avant, J (2000) A Study of the Supply and Demand for Construction Education Graduates, Journal of Construction Education, Spring 2000 Vol. 5. No 1, pp 78-89

Byfield, M.P. (2001). Graduate shortage: the key to civil engineering’s future? ICE Proceedings: Civil Engineering, 144(4), 161–5.

Cavill, N (1999) Where have all the young QSs gone? Building, 26 March, 24–25.

CITB (Construction Industry Training Board) (2002). CITB Skills Foresight Report February 2002. CITB, King’s Lynn, UK.

Crosthwaite, D. and Connaughton, J. (2004, November 11). World Construction Review 2003/4 [WWW document]. URL www.davislangdon.com

Department of Trade and Industry (1997). State of the Construction Industry Report [WWW document]. URL http://www.dti.gov.uk/construction/stats/soi/sir8.htm

Department of Trade and Industry (2003). State of the Construction Industry Report [WWW document]. URL http://www.dti.gov.uk/construction/stats/soi/soiwinter0203.htm

Department of Trade and Industry (2004, 10 September). Construction Statistics Annual [WWW document]. URL http://www.dti.gov.uk/construction/stats/csa2004.htm

Higher Education Statistics Agency (2003). Student Tables: Subject of Study 2002/3 Table 2e [WWW document]. URL http://www.hesa.ac.uk/holisdocs/pubinfo/student/subject0203.htm

Higher Education Statistics Agency (2004). Student About HESA [WWW document]. URL http://www.hesa.ac.uk/about/home.htm

International Labour Organization. (2004, November 11). Global Distribution of Construction Output and Employment, [WWW document] URL http://www.ilo.org/public/english/dialogue/sector/sectors/constr/global.htm

Ross, T. (2001). Making your mark. Building, 23 February, 36.

	Recruitment to part-time programs has been growing. In 2002, the number of students in UK part-time undergraduate programs exceeded the number in full-time programs for the first time since construction management programs became part of the university mainstream (HESA, 2003).
	There has been an increase in the number of conversion programs where students, whose first degree is not cognate with construction, study a postgraduate program in construction, often part-time, to enable them to take up employment in the industry.