What’s holding the Construction Industry Back?

It has been repeatedly reported that the UK’s construction industry (housing construction in particular) was one of the first sectors to feel the full scale of the impact the recession bought with it, and was also one of the slowest when it came to recovering.

While many other industries have been benefitting from a widening talent pool thanks to the ever advancing digital revolution, it seems that the construction industry is experiencing a tightening on the talent that is readily available.

In 2014, the Construction News Barometer found that almost 90% of construction leaders said that the skills shortage was one of the top challenges that their business faced. 88% of leaders also thought that a lack of both skills and staff was a major concern for the future of the business. Employment figures over the past few years have caused concern in the industry because it appears that it is suffering from a shortage of skilled workers.

In fact, the UK construction industry saw a decrease in ‘all work’ by 4.5% when compared with March 2015. The recession has created a paradox, because while we are experiencing a lack of skilled labourers there is also approximately 150,000 skilled construction workers that remain unemployed. While some of these workers have re-entered the sector, many have gone on to find work in industries that are flourishing, such as financial services and manufacturing. This being said, the total economic output for the UK construction industry in 2014 was £103 billion, 6.5% of the UKs total output; just 0.4% shy of its highest contribution in 18 years which was 6.9% in 2007.

Lee Bryer, Research and Development Operations Manager for the Construction Industry Training Board (CITB), added: “Many of them may be lost to the industry for good, as that has happened with other recessions, but other people could be waiting for the right conditions. The issue is where the work is: whether the wage is attractive enough and whether they are appropriately skilled.”

In July 2013, the coalition government published Construction 2025; a document that outlined the 10 year industrial strategy that would work to:

  • Reduce the initial cost of construction and the whole cost of life assets (from 2009/2010 levels) by 33%
  • Reduce the overall time from inception to completion for a new build and refurbished assets (based on industry standards in 2013) by 50%
  • Reduce greenhouse gas emissions in the built environment (compared to 1990) by 50%
  • Reduce the trade gap between total exports and total imports for construction products and materials (from February 2013 deficit of £6 billion) by 50%

A Plan for Growth policy was also published alongside the 2011 budget; this outlined the way that the government planned to encourage growth in a number of UK industries, construction to be one. The policy highlights the importance of the investment in house building and infrastructure projects for our economy. It also contained particular actions the Government were to carry out that would assist the growth of the construction industry, along with general actions such as reforming the planning system and reducing regulations. The FirstBuy housing scheme has seen jointly funded equity loans helping a forecasted 10,000 extra people purchasing new homes; this is expected to accelerate growth in the sector along with stamp duty tax reforms.

“While I think that overall, yes there is a skill shortage within the construction industry, I’m happy to say that we have not been affected so far. We specialise in period and listed properties, it’s a niche area and there is always a demand for our skills, especially given the area that we live in. explains Steve Gilbert, owner and director of Steve Gilbert Building Services, “However, if this industry and the skills required aren’t recognised and nurtured properly at an appropriate age then I can see it swiftly becoming a real issue. It would be difficult to continue our business for many years to come if I don’t have the trained employees to carry out the level of work required.”

Just as the dust was beginning to settle when it came to political elections and policies, the Brexit gun was fired. The industry has relied heavily on foreign workers for a number of reasons, in both skilled and non-skilled positions. However, contrary to popular opinion, this is not an entirely new activity. Back in the mid-20th century there was a labour shortage which was filled with Irish migrant workers. At present, the movement between countries in the EU has meant that the construction industry has a vital resource of workers, an exit would potentially mean the resource would dry up almost instantly and the sector could once again face a skills shortage.

However, it’s not only the skills shortage we could face due to leaving the EU. The European Union is a trading union, removing the barriers that could make trading and investment between countries more difficult. In fact, a number of large manufacturing giants have already voiced their concern about continuing to trade with Britain should they leave the EU. As we would be the first country to ever leave the EU, it’s unlikely that companies would be willing to invest until the post referendum financial landscape provides a clearer picture.

Does anyone remember when George Osborne said “Britain is open for business”? Let’s hope that he is that passionate about those words that he is working tirelessly in a pursuit to protect the notion, especially when it comes to the UK construction industry.

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