Poor product data costing construction industry billions, new report warns

The UK construction sector could be losing as much as £3.8 billion every year because inconsistent and fragmented product information continues to hamper project delivery, according to new research from GS1 UK and Barbour ABI.

The report argues that poor-quality product data is creating unnecessary costs across the construction supply chain by increasing delays, rework and administrative effort, while also making it harder for organisations to comply with the requirements of the Building Safety Act.

Billions in avoidable costs

The estimated £3.8 billion annual cost is based on analysis comparing construction with the NHS's Scan4Safetyprogramme, which uses globally recognised barcode standards to improve the identification and tracking of products, locations and patients.

The healthcare initiative found that adopting standardised supply chain data reduced inventory costs by 7.42%. Applying a similar level of efficiency to the construction industry's estimated £51 billion annual spend on products suggests significant savings could be achieved through better data management.

According to Iain Walker, Director of Industry Engagement at GS1 UK, the figure illustrates the financial impact of poor information sharing throughout the sector.

He said the costs arise from time spent searching for product information, manually checking specifications, resolving errors, managing substitutions and correcting mistakes that often lead to delays, additional expenditure and reduced accountability.

Fragmented supply chains slowing projects

The report found that poor digital information management is already affecting project performance.

More than half (52%) of construction professionals surveyed believe inadequate digitalisation is costing their organisation money, rising to 69% among larger businesses.

Meanwhile, 60% said inefficient access to product information slows project delivery, while almost half described current approaches to managing product data as disorganised.

Rather than a lack of technology, the report identifies fragmentation across the supply chain as the primary challenge.

Construction projects often involve manufacturers, consultants, contractors, subcontractors and clients using different digital systems that struggle to exchange consistent information.

Walker argued that improving interoperability between existing platforms is now more important than simply investing in additional software.

Building Safety Act compliance remains a challenge

The research also highlights concerns over the industry's readiness to meet the requirements introduced under the Building Safety Act.

Although almost every respondent (98%) said they were familiar with the legislation, only 21% believed their organisation was fully prepared to comply with its requirements.

Many businesses continue to rely on disconnected databases, PDF documents and manual checking processes, making it difficult to demonstrate which products were specified, installed or substituted throughout a building's lifecycle.

Confusion over the 'golden thread'

The report also examined understanding of the golden thread—the digital record intended to maintain accurate and accessible information about a building throughout its life.

While awareness of the concept is widespread, genuine understanding appears to be much lower.

Although 89% of respondents had heard of the golden thread, only 14% said they fully understood what it requires in practice.

Walker warned there is a risk organisations could treat the golden thread simply as a document repository rather than the dynamic safety record envisioned by the Building Safety Act.

Product substitutions identified as a major risk

Managing product substitutions also emerged as a significant concern.

The report found that 84% of respondents encounter product substitutions during projects.

While substitutions are often unavoidable because of supply chain pressures or changing availability, the report warns they can become a compliance and safety risk if organisations cannot easily verify that replacement products meet the same performance requirements as those originally specified.

Without reliable product information, demonstrating compliance and maintaining an accurate audit trail becomes increasingly difficult.

Concerns over housing ambitions

The findings also raise wider questions about the industry's capacity to meet the Government's housebuilding ambitions.

Just 7% of respondents expressed confidence that the target of delivering 1.5 million new homes by 2030 can be achieved, suggesting concerns over productivity, digital maturity and regulatory compliance continue to weigh on the sector.

The report concludes that improving the quality, consistency and accessibility of product data could unlock substantial productivity gains while strengthening building safety, reducing project risk and helping the industry deliver homes and infrastructure more efficiently in the years ahead.