After a long period of scratching around that probably seems an awful long time ago the construction industry is well and truly in a state of growth.
The Construction Products Association (CPA) has been accurately forecasting the state of the trade for many years. It is now anticipating construction output to grow 4.7 per cent in 2014 and 4.8 per cent in 2015. In some areas there are spectacular rises: industrial warehouse by a whopping 20 per cent and private housing by a staggering 18 per cent.
The JLL and Glenigan UK Commercial Construction Index reported that: “Work began on some £22.7 billion of commercial projects over the 12 months to June 2014, a year-on-year increase of 6.6 per cent. This demonstrates that developers are responding to rising corporate confidence and, in particular, there has been a notable increase in demand for high quality, modern, attractive spaces that can drive greater productivity and staff retention.”
Even education is set to bounce back, admittedly only a 2.2 per cent rise in 2014 after three years of consecutive falls. The health sector remains in the doldrums with the sixth consecutive year of falls, due to lack of PFI work.
All in all this looks like a good time to be in the fit-out and finishes sector, with order books growing and members telling us they are at or near full capacity, so let’s celebrate that. This should be a good opportunity to restore balance sheets and improve profitability.
As with all things in construction it seems to be feast or famine and with the feast come fresh problems, or rather old problems we haven’t had to deal with for a while. Labour and skills shortages, wage and material price rises.
Skills are a perennial problem that has no simple solution. Productivity improvements can address some of
the demand but when work picks up it’s skilled tradesmen that are needed. In the medium term if local trade skills are not available there is only one solution; a return to importing labour from elsewhere in Europe. While this may not be politically palatable in the short term, it is a fact of life.
What causes the problem is a lack of good quality new entrants. The poor image of the industry and the lack of a career path both need resolving before this will be solved. And then there is matching potential trainees with courses and funding. How do we recognise the average entrant to the industry is over 20 and isn’t living with his parents. He (and it is almost always he) has dependents and can’t afford to fund training and low wages whilst he becomes qualified.
How do you promote a skilled workforce when no-one is demanding that a qualified person completes installations? All these elements compound to create what appears to be an insoluble problem but we have to start somewhere.
AIS FPDC believes that training and skills should be one of the cornerstones of our future strategy. We have committed to getting everyone to NVQ level 2 by 2020 and able to get a CSCS blue card as a skilled worker. This requires the enforcement of CSCS cards on site to act as a driver. There are signs this is beginning to happen on more and more sites. In turn there appears to be a recognition amongst site staff that getting a formal qualification and becoming carded is going to be more important in the future. Small steps but important nonetheless.
Of course if we create demand for training we have to be able to meet that with the minimum of fuss and paperwork; a challenge for our training strategy.
And skills are not the only challenge. Material prices are bound to come under pressure as demand increases. Good supply chains are built on trust and long term relationships. Many were tested to the extreme during the recession. Let’s hope that people remember that there is give and take in all relationships and that sometimes short term gain can come at considerable expense long term.
Overall though, this is a time to be optimistic. The new football season is now underway and as with every season I start with a huge sense of optimism and hope. It’s the hope that gets you in the end!
AIS FPDC Chief Executive