Skills and costs create a ‘ticking time bomb’ for construction

57% of building contractors reported that private new housing output rose during Q1. Photo: David Holt
57% of building contractors reported that private new housing output rose during Q1. Photo: David Holt

The skills shortage and rising labour costs were said to be a ‘ticking time bomb’ for the construction industry, as the latest Construction products Association trade survey shows the industry growing for four consecutive quarters for the first time in six years.

 

Construction activity rose for the fourth consecutive quarter in Q1 this year, the Trade Survey found.Firms across all areas of construction saw increased output including building contractors, SMEs, specialist contractors, civil engineers and product manufacturers.

 

CPA economics director Dr Noble Francis said this indicates that activity will continue to rise throughout 2014.

 

But national chair of the National Federation of Builders Paul Senior warned: “Higher labour costs and a lack of available skills are a ticking time bomb that needs to be defused urgently otherwise, for many SMEs, the premiums attached to the cost of simply building will become unsustainable.”

 

The survey showed 57% of building contractors reporting that, on balance, private new housing output rose during Q1 compared with 20% in 2013 Q4, while 47% of firms said tender prices rose in Q1 versus only 2% in 2013 Q4.

 

Dr Francis said: “Unsurprisingly, private new housing was the key driver of construction activity,” adding: “Tender prices rose in Q1 but any boost from this is likely to occur when the resulting work hits the ground later this year.”

 

However cost rises in Q1 were a key concern, with 77% of building contractors reporting that overall costs rose. This included 89% of firms experiencing rises in material costs and 50% of firms having to pay out more for labour costs, much higher than the 7% of firms reporting the same thing at the start of the 2013.

 

Another key issue was technical skills availability. Dr Francis said: “61% of building contractors reported that it was difficult to obtain bricklayers during Q1 compared with 41% in Q4 and only 10% one year ago.  A further 28% reported that they had difficulty recruiting carpenters.”

Please rate

Comments 

Ctrl + Enter

Most Read

How Blockchain Technology is changing the Energy Sector

How Blockchain Technology is changing the Energy Sector

The disruptive potential of blockchain technology is becoming more evident with every passing day. From the proliferation of cryptocurrencies, and its increasing applications in other areas including banking, gaming, music licensing, as well as the energy sector, blockchain technology is

How to deal with interview rejection

How to deal with interview rejection

Sorry we think you’re not the ideal fit for this position or sorry to inform you, but you are not exactly the candidate we were hoping for – these are some of the replies you may get from an unsuccessful interview, and while it can sting for a day or two, you should not dwell on it any

Mirroring England’s Young World Cup Team in Engineering

Mirroring England’s Young World Cup Team in Engineering

Alas, the cup didn’t come home. However, it's wasn't all doom and gloom as 4th placed England at the just concluded FIFA World Cup in Russia, were not initially expected to perform wonders. However, in the course of the tournament, the belief grew, and hopes were raised. Gareth

This website uses cookies to enhance your user experience. By continuing to use this site, you consent to our use of these cookies. See our Cookie Policy.