Research and development spending in construction jumps more than 10%

R&D spending in the UK construction industry has jumped 11.5% annually to a new record high, according to the latest ONS data. Total construction sector spending on R&D rose to £417m last year, an increase of £43m from the £374m recorded a year earlier1.

The industry now employs 6,000 people directly involved in R&D, however, the rate of growth in R&D spending has slowed from the 16.9% rise recorded in 2018.

Uncertainty surrounds what impact the Covid-19 pandemic will have on the level of investment this year, though the construction sector continues to pursue a range of technological advances, not least progress in Modern Methods of Construction (MMC) and environmental performance.

Mark Tighe, chief executive of R&D tax relief specialists Catax, said: “The construction industry continues to harness technological advances that will transform the sector over the next decade. It’s certain that the total amount spent on R&D will only increase across the sector but it remains to be seen what impact the coronavirus will have on spending this year.

“While companies typically take a very long term view on R&D, laying the ground work for the future, the disruption to the economy and working life this year has been so dramatic that a dent in the industry’s track record of consistent growth in R&D spending would surprise no one.”

The amount that UK businesses across all sectors have invested in R&D continues to grow, rising 3.3% to £25.9bn2 but this was the slowest rate of growth since 2012.

The pharmaceutical sector posted the largest increase in R&D expenditure, with an increase of £306m (6.9%) to £4.8bn.

The largest percentage terms increase in R&D spending was achieved by the printing, pulp and paper industry, which saw a 31.4% increase to £92m.

The number of people employed by UK businesses to perform R&D also continued to grow, rising 4.4% annually to reach 263,000 full-time equivalents2.