Our UK Construction Market Survey for Q4 2015 shows that the skills shortage continues to hamper growth and drive up wages throughout the industry.

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Summary

  • Construction skills shortage pushes industry wages up by more than 6% in 2015
  • 61% of property professionals report that sector wages are continuing to rise
  • Skills shortages reported to be the biggest barrier to growth in the UK construction sector

Skills shortages

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, our the latest survey reveals.

Our UK Construction Market Survey shows that 61% of construction professionals have reported sharp wage rises in the sector. Average construction earnings have risen by more than 6% 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 by 66% of construction professionals to be the most significant barrier to growth in the last quarter of 2015. Bricklayers and quantity surveyors are reported to be in particularly short supply, with 62% and 60% of survey respondents having difficulty finding these workers.

Profits still on the rise

Net lending to the sector fell by a further £274m in the three months to November, and 64% of respondents highlighted continuing issues around financial constraints. Despite these concerns, 45% said that they expected profit margins to rise over the year to come.

The survey revealed that a net balance of 33% of respondents were still seeing an increase in the number of new projects they were taking on down from 39% in the third quarter. The private commercial and private housing sectors continue to be the key drivers of construction activity.

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.

Comments (1)

  1. The view from RICS

    “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.”

    Simon Rubinsohn

    Simon Rubinsohn, RICS Chief Economist 13 January at 12:51PM

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