With news of tariffs and trade wars breaking by the hour on Truth Social, Jim McClelland asks: Will de-globalisation be good or bad for construction, and can sustainability help?
Only six months ago, globalisation was still seen as desirable. Business boasted of supply chains that spanned the Planet, transporting good and services continent-to-continent. Digital innovation was shrinking time and space, while the real world raced to keep pace.
Back then, almost nobody talked about tariffs, except for one man: Donald Trump; the same Donald Trump who was about to become President of the United States, again.
The script is very different now: isolationism stands loud and proud, centre-stage; the chorus consists of onshoring, re-shoring and near-shoring; the drama unfolds daily.
So, where does this rewrite leave a global player like construction? What is its role?
This multiplier effect is even greater when the spend is clean and green, making the business case for sustainability
Jim McClelland Sustainable futurist, editor, journalist and speaker
Caught in the crosshairs
Well, in the case of UK trade, it is important to place construction in context.
Data just out tells the tale: official UK import and export figures for construction building materials in 2024 paint a pretty stable picture for the year, after a more volatile 2023.
Exports of construction materials came in at just over £8.5bn, down marginally (-0.4%) year-on-year. Imports for the same period totalled almost £23bn (+1.0%). This means the UK trade deficit in construction materials widened by £259M (+1.8%) to roughly £14.5bn.
Drilling down into the details reveals that the top five exported materials in 2024 accounted for 35.8% of the total. Listed in order of magnitude these were: electrical wires; paints and varnishes; lamps and fittings; builders’ ironmongery; and air conditioning equipment.
The top five export markets made up more than half the total (53.5%) and were almost exclusively located in the EU, with one notable exception. In order of magnitude, the list reads: Ireland (18.3%); United States (12.2%); Germany; the Netherlands; and France.
As for imports, the top five construction materials in 2024 accounted for 29.4% of the total, with the category breakdown looking markedly similar: electrical wires; lamps and fittings; sawn wood (over 6mm thick); air conditioning equipment; and builders’ ironmongery.
Again, the top five import markets (45.1% of the total) were all in the EU, except for the biggest name on the list: China (18.2%); Germany; the Netherlands; Italy; and Spain.
Overall, therefore, construction is caught squarely in the crosshairs of the tariff wars, with China as its biggest trade partner for imports, and the US its second-largest export market.
So, what does this mean for the UK in the short term? And how can sustainability help the built environment sector manage the de-globalisation trend more strategically over time?
Collateral damage
Well, it is not going to be easy. If trade wars persist or worsen, almost no economy, sector or business will realistically escape completely unharmed. We are all collateral damage.
Obviously, it will help if central government can deliver some meaningful investment into the likes of housing, whilst maintaining support for increasing numbers of heat pumps.
However, there is little likelihood of any sizeable uplift in spending, with the public purse in the UK known to be as good as empty, long before President Trump returned to office.
Furthermore, disruption from the tariff to-and-fro will only serve to squeeze what little cash there is to go around, prompting almost every sector in the UK to put its hand out for help.
In other words, construction cannot expect to be bailed out by central government.
Resilience planning is a must for the built environment.
The latest UNEP report is adamant that most of the solutions we need already exist
Local, clean and green
Whilst national politicians wheel and deal wherever they can to secure agreements and exemptions, supply chain managers will be busy trying to manage and minimise risk.
There is no panacea, but there can still be a plan — one that is affordable and doable.
Meantime, in a de-globalising scenario, adopting a ‘local approach for local people’ will assume even greater priority — and not just because the business world is getting smaller. The local economic multiplier effect means pounds make pounds, and jobs beget jobs.
This multiplier effect is even greater when the spend is clean and green.
Recent analysis from the Energy and Climate Intelligence Unit (ECIU) estimates that each full-time net zero job generates value 38% above the UK average, with every £1 creating an additional £1.89 in the wider economy. This is the business case for sustainability.
For once, if you can’t go big, it really is best to go home: go local, clean and green.
Small is beautiful
Furthermore, small is beautiful, especially when it comes to footprints and bills.
In the built environment, there are significant operational efficiencies yet to be realised around emissions and energy consumption, not least in the likes of commercial real estate.
The latest United Nations Environment Programme (UNEP) report is adamant that most of the solutions we need already exist — scaling them is the real challenge.
Admittedly, certain efficiencies may depend on digitally enabled products and services, some driven by artificial intelligence (AI). These are precisely the kinds of tech targeted by tariffs — so ongoing or escalating trade wars will inevitably lead to trade-offs.
Nevertheless, there are still quick wins to be had in terms of savings.
Sustainability and strategy
Tactically, these partial fixes and marginal offsets all add up, incrementally. None of them alone will be sufficient to cushion the immediate, exponential impact of a global trade war.
In fact, even combined they will probably fall some way short of compensating fully for lost revenue growth, profit reductions and the opportunity-cost of enforced market exits.
In other words, de-globalisation will be bad for business, at first.
Strategically, though, things can be different, over time; maybe even good.
So, go local, clean and green; save small; and stay sustainable.
Jim McClelland is a sustainable futurist, editor, journalist and speaker
