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The UK construction industry is expected to experience major downside risks to growth following UK’s vote to leave the European Union, according to a new report.Timetric’s Construction Intelligence Center (CIC) new report, entitled ‘Brexit and the Impact on Construction in the UK’, concluded that the UK construction industry growth is expected to fall from 3.4% to 2.8% this year.The findings reveal the great deal of uncertainty as to what the full implications of Brexit are for the UK’s construction industry.Danny Richards, leading economist at CIC, recognizes that the industry growth started being affected during the EU referendum campaign.“Construction output growth had already started to slow ahead of the referendum, in fact output was down by 1.9% in the first quarter on a year-on-year basis, and the uncertainty that will prevail in the coming months following the referendum suggests that investment flowing into new projects will slowdown, and some works could be put on hold,” he said.Furthermore, the pace of growth in the UK construction industry in 2017 is expected to slow from 4% to 1.5% — reflecting a sharp downturn in investment as the government embarks on a two-year process of negotiating its exit from the single market.“The downwards revisions to our growth forecasts for construction output mean that the UK’s construction industry’s output in 2017 will be £4.8bn lower than what it would have been had the outcome of the referendum been in favour of the ‘remain’ campaign,” said Richards.
Waking up at 5.30am, spending two hours travelling to the construction site, starting work around 8am — regardless of the weather conditions — finishing the workday at 4pm and travelling back home for two hours, is the routine of construction worker Ben Grant.Grant lives in Bournemouth, but works in London. The 23-year-old turned down a warehouse career to follow one in the construction industry. “I like working in construction, because you can see the progress you are making. At the end of the day you can look back and see what you’ve accomplished, because it’s just right in front of you,” says Grant.Even though working in construction can be personally rewarding, a high demand for workers has been reported by the UK construction industry in recent months and years. “There is definitely a high demand for more construction workers. I am aware that the company we are subcontracted to is needing at least 100 more workers at the moment and I can only imagine that this is a problem throughout lots of [construction] companies,” says Grant.A survey of construction recruitment firms, recently released by the Recruitment & Employment Confederation (REC) — a membership and professional body for the UK recruitment industry — highlighted that demand.The survey also concluded that 69% of the construction recruitment agencies surveyed believe that the shortage of bricklayers, labourers and other tradesmen constitutes the first or second most significant risk to their businesses.Kate Shoesmith, REC’s head of policy, says: “One of the things that comes up time and time again [in the survey] is that in the construction industry there is a high demand [for workers] and some of the roles are really difficult to fill and to find people with the appropriate skills. “They [recruitment agencies] are saying that it is really difficult to find bricklayers, scaffolders and estimators for the temporary construction jobs. If you look at the engineering side, they are talking about high ways engineers and structural engineers. If you look at the permanent jobs, where it’s difficult to find people in construction, they are saying that it’s very difficult to find architects right now.”Bespoke Recruitment Ltd has been supplying construction workers to the sector since 2001 and has been feeling the pressure. “We have a skill shortage at the moment in construction and we are struggling. We have demand for construction workers,” says Simon Noakes, co-founder and director of Bespoke Recruitment Ltd.Meanwhile, the Chartered Institute of Building this week promoted the concept of former servicemen and women from the Armed Forces joining the construction industry, ahead of the UK Armed Forces Day on June 25.The recessionThe UK construction sector has come a long way since the global recession in late 2007, which saw a reduction in construction projects and consequently a reduction in construction jobs across the sector. In recent years, the sector has been picking up the pace — as can be witnessed in London by looking at the skyline and the number of cranes and construction sites active in the city.The latest employment data released by the Office for National Statistics (ONS) corroborates this scenario. According to the ONS, the construction sector was the second biggest job creator in 2015, accounting for 25% of job growth that year. And, construction output has risen 2.5% in April 2016 — the biggest monthly increase since January 2014 —slowing down now only due to the EU Referendum and the uncertainty it brings with it.The industry has a number of jobs to offer, but simply no people to fill them. “There are lots of opportunities in construction at the moment and we cannot fill these roles,” says Noakes.“We have no pipeline of talent coming through the industry, so we don’t see many 18- or 21-year-olds going to college learning to be a plumber or a bricklayer.” Despite the recession starting almost ten years ago, parts of the construction sector are still paying the price of a shortage of workers.Shoesmith at REC says: “The global recession affected the UK market particularly deeply.“There were a number of people working in the industry who, when the jobs stopped coming, [started] thinking about whether they would continue to work as labourers. There were an awful lot of building projects that just stopped and there was no more commissioning of new building projects in the UK. When the jobs started to dry up they left the industry.”Misperception and lack of informationAdding to this, Clive Turner, research manager of NHBC Foundation — the research arm of NHBC, the UK’s leading home warranty and insurance provider — believes that there is still a misperception and lack of information not only about the industry, but also about the jobs it offers. “There is a perception about house building having a bad reputation in terms of what it offers. People don’t see it offering a career progression,” says Turner.“What we fear is that people don’t see the progression opportunities. They would like it to be a worthwhile job, but they are not sure it is, and I think they don’t always see that what you do can be extremely rewarding. “If you don’t realise [that] there is a career path that you can follow you will be forever thinking this could be a dead end job for anybody. There’s nothing worse than that.”A recent study by NHBC Foundation concluded that nearly 50% of parents are not doing enough to encourage their children to pursue a career in the construction industry, specifically in the house-building sector. “[It is] quiet a serious concern and we need to do more to encourage parents to be aware of what house building can offer,” says Turner.“There is a disparity between what house building can offer and what is actually offered to young people through their parents or career advisers. “The issue is the absence of a suitable level of information and guidance on what are a range of very interesting jobs.”Possible solutionsOne way of addressing this issue is attracting and captivating young people into the industry. “We need to think about recruitment and retention strategies, we need to see more investment in things like apprenticeships, that used to be a really golden route for entering the jobs market in construction,” says Shoesmith. “It was a highly credible route. “We need to see more government support for that. We obviously need to think about how we give career advices to young people before they are even thinking about the job options. “Do young people know that there are really good careers to be having in the construction industry? Are they aware of all the opportunities for them?”Other way of engaging young people into the construction sector is offering them a wide range of work experience opportunities while they are still of school age, because — according to Shoesmith — “it’s only by seeing what is like to work in the industry that you can actually visualise yourself there and see whether is something that is right for you”.The Crossrail project has addressed the shortage of skills in the UK construction industry by setting up an academy, where they have trained 20,000 people to develop tunneling and construction skills. They have already had 550 apprentices go through the system.Initiatives such as this can help to encourage workers to join the construction industry — as may the wage rise that has taken place across the sector.The latest employment data released by the ONS shows a 7.5% year-on-year increase in wages in the construction sector.“There are obviously huge rewards there, because the pay is increasing in this sector as the skills supply gets worse,” says Shoesmith.REC’s survey also concluded that some bricklayers are taking home £1,000 ($1,470) a week. Kevin Green, REC’s chief executive, says: “If you work in construction you can expect to be earning £34 a week more than last year, and our data indicates that some employers are increasing pay faster as the competition for skilled workers intensifies.” Expected to attract a wide range of people into the industry, Bespoke Recruitment Ltd is following this trend: through the agency a bricklayer is paid £180–£200 a day and a labourer £8.50–£9 an hour.
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