Regional and Business Growth through IC3.The North East currently has around 9000 construction businesses with a collective annual output of £3.5 billion. Despite the productivity gap between the North East and the rest of the country, construction has outperformed the national average growth since 1997 (+34%) and could be a key sector in redressing the balance of the economy. The North East has several capabilities that could support the continued growth of sector productivity.
The Northern Powerhouse Independent Review (2016) and the North East Local Enterprise Partnership’s Strategic Economic Plan identify digital, advanced manufacturing and energy as three key regional strengths. These are also key disciplines for achieving the goals set out in the Industrial Strategy’s Construction Sector Deal to create built assets 33% cheaper, 50% quicker and with 50% reduction in greenhouse gas emissions.
The Construction Leadership Council’s ‘Roadmap to Recovery’ reinforces this, placing manufacturing and digital at the heart of reducing lifetime costs and delivery times, and lists Net Zero as a priority delivery area post COVID-19.
Digital already contributes £2billion to the regional economy and has generated 74,000 new jobs – 93% of which are more highly skilled jobs. However, there are just 50 companies in the digital construction cluster of the North East’s digital network (1% of the region’s construction sector). Increasing the application of digital could drive productivity gains. Manufacturing makes up over 15% of GVA in the NELEP area with significant research programmes in energy (£50 million).
IC3 will bring these together to grow the digital construction cluster, bolster complementary industries and drive regional productivity.
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