Workload expansion in the East despite rise in skills shortages

ConstructionDESPITE a further rise in skill shortages private construction workloads continue to increase strongly.

Construction workloads rose in the final quarter of 2014, with the East seeing strongest growth in the private industrial and infrastructure sectors, but the shortage of bricklayers reached a record high, according to the latest RICS UK Construction Market Survey.

Over half of respondents in the East (64% net balance) reported that workloads in the commercial sector had grown in Q4 2014, which is the fifth consecutive quarter where the reading for workloads has been above 50%. Private industrial workloads rose to a net balance of 54% (up from 39%) and infrastructure followed at 40%, while overall construction workloads in the region reached a 46% net balance.

Looking at growth restraints, nationally around 60% of respondents reported that either material shortages, skill shortages or financial constraints were impeding further sector growth, while the proportion of respondents reporting labour shortages across all of the main trades climbed to an all-time high of 48%.

Despite these factors and anecdotal evidence that the upcoming election in May is creating industry uncertainty, confidence remains firm in the East, with 85% more respondents expecting workloads to increase and 58% more expecting employment to increase.

Elsewhere, in the East the public housing sector continued to see what has been a much steadier pace of growth over the last 12 months and in Q4 2014, 16% more respondents reported a rise in workload activity.

RICS Director of the Built Environment, Alan Muse, said:

“Labour shortages have become increasingly onerous in every area of the sector since the industry began to recover in mid-2013, with bricklayers and quantity surveyors in particularly short supply.

Now that workloads are rising and optimism is growing, the practical challenges are in providing the skilled labour the industry needs and in alleviating the financial constraints, which saw nine months of decreased lending in 2014.

“The political challenges in the run-up to the election are around shoring up industry confidence to ensure the framework for effective planning and delivery of projects are in place to create long-term growth that is spread across the UK. This will also enable the investment that the industry needs to raise productivity and encourage new training initiatives.”

RICS UK Construction Market Survey Q4 2014 – CLICK TO DOWNLOAD