Widespread housing construction workload expansion despite rise in skills shortages

Despite a further rise in skill shortages private commercial workloads continue to increase strongly

Private commercial and housing construction workloads rose in the final quarter of 2014 but the shortage of bricklayers reached a record high, according to the latest RICS UK Construction Market Survey.

Over half of respondents (52% net balance) reported that workloads in the commercial sector had grown in Q4 2014, which is the fourth consecutive quarter where the reading for workloads has been above 50%. Private housing followed at a net balance of 45% and industrial at 40%, while overall UK construction workloads reached a 39% net balance.

Looking at growth restraints, 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 with 75% more respondents expecting workloads to increase and 55% more expecting employment to increase. Members’ anticipate growth in workloads of 3.4% in 2015 with jobs in the sector expected to rise by a further 3%.

Elsewhere, the infrastructure sector continued to see what has been a much steadier pace of growth over the last 12 months and in Q4 2014, 23% more respondents reported a rise in workload activity.  In Northern Ireland, the picture remains a little more downbeat compared to the rest of the UK.

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.”