Skills shortages continue to hamper growth in SW
The RICS UK Construction Market Survey, Q4 2015, shows labour shortages were reported by 66% of construction professionals across the UK to be the most significant barrier to growth in the last quarter of 2015.
In the South West 44% of respondents agree there is a skills shortage. Quantity surveyors are reported to be in particularly short supply with 57% of survey respondents citing a shortage of these professionals. However only 38% reported problems in finding other construction professionals compared with the national average of 52%.
While workloads are still increasing – a net balance of 24% of South West respondents saw an increase in workloads over the last quarter – the pace of increase has slowed over the past two years. However, respondents in the South West remain positive with 54% more respondents expecting a rise rather than fall in workloads over the next 12 months.
In contrast to the other sectors, workloads in public sector housing have decreased with 10% more survey respondents seeing a decrease rather than an increase in demand over the last three months
Nationally construction skills shortages have resulted in average construction earnings rising 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%. However RICS warns that this could put at risk some of the Government’s biggest housing and infrastructure programmes.
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, 33% more respondents in the South West said that they expected profit margins to rise over the year to come rather than fall.
Both input costs and output costs are rising in the region, with input costs rising at a faster pace.
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 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.”
