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.
The RICS 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 2015 – 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.
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.”
RICS Skills and 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.”
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.