Construction Sector Skills Shortage

Almost half of all specialist contractors are struggling to recruit skilled workers, according to new data.

The shortage of skilled labour is at its highest point for 14 years, according to a report ftom the National Specialist Contractors Council (NSCC).

Just under half (47 per cent) of specialist contractors have experienced difficulty in recruiting skilled workers during Q1 2015, said the report.

By contrast, only two percent of specialist contractors have found it less difficult to recruit than in the previous quarter.

As a result, the balance of recruitment difficulty – the difference between the number of firms reporting greater difficulty recruiting and those reporting less difficulty in recruiting – now stands at its highest point since 2001.

More than three quarters of specialists (77 per cent) cited the low number of skilled applicants as a reason for the recruitment crisis, while a lack of required experienced (54 per cent) and a lack of required qualifications (41 per cent) were also given as reasons.

The shortage of labour left 28 per cent of specialist firms unable to bid for work – this is higher than any point since Q2 2007.

But for the first time in 18 years, half of all specialists expect that recruitment levels will rise over the next quarter, compared to 2 per cent expecting them to fall.

And despite the increasing pressure of skills shortages, specialists’ work outlook is positive.

Nearly two-thirds (65 per cent) of specialist contractors reported an increase in enquiries, up 27 per cent on Q4 2014, while 54 per cent saw an increase in orders in Q1 2015.

A record 78 per cent of specialists expect to see an increase in workload over the next 12 months, while only 2 per cent are forecasting a decrease.

Although workloads are increasing, tender prices have now hit a record high, with 54 per cent of specialists reporting an increase during Q1. The net balance of +43 is the highest ever recorded by the NSCC survey.

More positively, no respondents had to wait more than 90 days for payment in Q1 2015, while 75 per cent were paid between 30 and 60 days and a further 20 per cent being paid between 60 and 90 days.

Only 5 per cent of specialists saw payment in under 30 days – below the five year average of 6 per cent.

Commenting on the survey, NSCC chief executive Suzannah Nichol said: “The growing construction market is great news for Specialists Contractors but we need to tackle head-on the skills crisis that is facing the industry.

“If we do not invest in recruiting and training people with the right skills, the industry will not be able to meet demand and this will impact on the wider UK economy.”

How the Construction Sector Reacted to the Conservative Government

Construction leaders have called on the incoming Conservative government to commit to a long-term infrastructure spending plan as the industry digests last night’s shock election result.

Rob Oliver, chief executive of the Construction Equipment Association, said that the continuity offered by the Tories’ victory was “generally welcome”.
He added: “The continuation and thorough execution of the existing strategies covering construction and manufacturing will be something we will press for.
“We will be particularly keen to see that the current construction pipeline remains intact and that longer term infrastructure projects are not side lined.”

Nelson Ogunshakin, chief executive of the Association for Consultancy and Engineering, said: “It is now vital that we continue with the infrastructure investment that will embed the economic recovery and reposition the UK as the economic power of Europe.
“The industry needs the government to honour the electorate’s wish for political stability and policy continuity to attract investment in the much-needed social and economic infrastructure.
“Notwithstanding, it is crucial that infrastructure continues to enjoy the cross-party support that has characterised the past five years.
“It must remain above the fray when progressing with the planning, financing, funding and execution of the current project pipeline contained in the National Infrastructure plan.
Alasdair Reisner, chief executive of the Civil Engineering Contractors Association, said: “The last five years have seen a steady push to improve the way infrastructure is managed through visibility of investment and workloads.
“This has created long term certainty, allowing for investment in skills, equipment and innovation, reducing delivery costs and making savings for the taxpayer.
“It is now imperative that an incoming government recognises the importance to the market of maintaining long term certainty for, and fully commits to, the existing project pipeline.”
There was also concern over the prospect of an EU exit, with David Cameron having committed to an in/out referendum if the Conservatives win a majority.

Guy Grainger, UK chief executive at JLL, said British businesses would look to avoid a referendum on EU membership.
“While most in business will be reassured by the continuity of the Conservative economic plan, there are concerns regarding the planned referendum on British membership of the EU in 2017,” he said.
“British businesses will remain committed to a strong position within the European Union and will need to engage in the reform debate to see if a referendum can be avoided.”
David Lutton, director of competitiveness and financial services policy at London First echoed this view.
“Our members are almost unanimous in wanting the UK to remain at the heart of the European economy,” he said. “One of the things that makes London such an attractive a location for global companies is that it is the business capital of the world’s biggest and richest single market.
“What is needed now is sensible and rational debate ahead of a referendum so that the public have all the information they need to make an informed choice – and business leaders have a strong role to play in that debate.”
There were also calls from industry voices for the incoming government to commit to tackling the housing shortage.
Steve Sanham, development director at developer HUB, called for the expansion of the Community Infrastructure Levy to be used to fund the development of affordable housing.
He said expanding CIL “would have the added benefit of speeding up the whole development process, and make buying land quicker and less complex, which in turn would help quicken the delivery of housing more generally”.
Mr Sanham added: “Planning guidance also needs reform to have greater emphasis on good design.
“Regulations still have a habit on focusing on the wrong aspects of design, which is why so many buildings are emerging that look so very similar, and are of inferior quality.”
Melanie Leech, chief executive of the British Property Federation, said: “We would like to see the government prioritise a coherent plan to deliver increased housing supply; to follow through on the commitment to fundamentally review business rates, and take action to put in place the right infrastructure – including real estate – that will allow our country to thrive.
“The prospect of an EU Referendum will inject uncertainty into the equation, and it is important to have clarity about its parameters and timetable as soon as possible.
“Our industry has the potential to significantly increase the amount of housing in the UK, regenerate our towns and cities, and contribute significantly to the economy if it is provided with the right legislative framework, and we look forward to working with the next government to achieve this.”

The Chartered Institute of Building, meanwhile, has called on the government to tackle the skills shortage and “change the image” of construction.
Eddie Tuttle, senior policy and public affairs manager at CIOB, said: “Whilst pledges that detail a commitment to the number of apprenticeships and graduates represent a significant shift in the right direction – and will undoubtedly help the industry with its response to the current skills shortage, there is a pressing need to change the image of the construction industry in order to attract the best, and the most skilled individuals.
“To achieve this, the industry needs strong leadership and greater recognition – across the political spectrum – of its strategic importance.
“By establishing a close dialogue with industry professionals, this Conservative-led government has the potential to raise the profile of construction and alter the public persona of a career in construction.”