Construction skills shortages are pushing wages in the sector far above the national average, but could also put at risk some of the Government’s biggest housing and infrastructure programmes, the latest survey by the Royal Institution of Chartered Surveyors (RICS) has revealed. Average construction earnings have risen by more than 6% nationally in the year to October – a marked increase on the average UK wage rise over the same period of under 2%.
Labour shortages were reported across the UK by 66% of construction professionals to be the most significant barrier to growth in the last quarter of 2015. This is born out by regional data which shows that 52% of respondents in the West Midlands were having difficulties sourcing labour. Quantity surveyors are reported to be in particularly short supply in the West Midlands, with 56% of survey respondents having difficulty finding these workers.
The RICS UK Construction Market Survey shows that 73% of survey respondents in the West Midlands reported an increase in input costs in Q4, the 21st consecutive quarter that input costs have increased in the region. Workloads have continued to rise with 36% more respondents seeing activity rise rather than fall. . Much of this growth has been driven by the private housing sector with a net balance of 44% of respondents seeing an increase in this area, as opposed to just 7% in the public housing sector.
RICS Chief Economist, Simon Rubinsohn said:
“While workloads are still growing at a relatively healthy pace, labour shortages in the construction sector are causing delays at different stages in the development process and leading to significant problems with project planning. More than 60% of our survey respondents said that these resulting planning delays were an impediment to growth.
“That said, industry wages are becoming increasingly attractive, and I would hope that over time this will encourage skilled workers to return to the sector, as well as drawing school leavers and graduates towards construction industry careers.”
Net lending to the sector fell by a further £274m in the three months to November, and 64% of respondents across the UK highlighted continuing issues around financial constraints. Despite these concerns, 45% said that they expected profit margins to rise over the year to come.
RICS Future Talent Director, Sally Speed said:
“The construction skills crisis is slowing growth in a sector that is vital to UK plc. Unless Government looks to address the problem urgently, some of its key housing and infrastructure programmes could soon face crippling delays and spiralling costs.
“To tackle the problem, Government must deliver a new skills strategy that will enable industry, unions, and educators to work together and deliver real solutions. Apprenticeships alone will not be enough. Ministers must look to draw a link between education, future careers and skills. Employers need to take the lead in improving skill levels, providing more vocational pathways to work and actively engaging with our country’s schools and colleges.”
Mark Smith MRICS of Turner & Townsend in Birmingham has said:
“Skills shortage is continuing to put pressure on project delivery which is resulting in increased prices and some lethargy in the supply chain.”
