Construction skills shortage hampering growth, says RICS

A lack of skilled workers across the sector remains an issue in the Midlands construction market, according to the RICS Construction Market Survey, Q4 2016.

Skill shortages were the most notable across the Midlands this quarter, and above the national average with a shortage of quantity surveyors being a particular concern. This quarter 75% of respondents highlighted this to be an issue – the highest figure since 2007. In addition to the concerns raised over a lack of quantity surveyors, surveyors reported a lack of other construction professionals including bricklayers to be holding projects back.

Despite skill shortages being an impediment to growth, the Midlands continue to report a relatively firm rise in workloads total workloads. Whilst not as adversely affected by the ‘EU Referendum confidence dip’ as other regions, the sector has now regained momentum with 28% of respondents reported an increase in workloads this quarter. Private industrial and infrastructure continues to outpace other regions with 32% and 24% of respondents, respectively, reporting growth in these areas.

During Q4, output increased in all sub sectors; however, public housing continues to grow at the slowest rate with only 2% more chartered surveyors reporting a rise instead of a fall in this area this quarter.

For the fourth consecutive quarter private housing continues to drive the construction market across the Midlands, and the whole UK, with 35% more respondents citing an increase in workloads. Private commercial also rose in Q4 with 33% more chartered surveyors reporting an increase compared to +24 net balance in Q3.

Meanwhile, both output and input costs rose in Q4 2016 with input prices extending a run of uninterrupted growth stretching back to Q3 2010.

In terms of infrastructure, respondents expect the road and rail sub categories to post the most significant increases with rail leading the way for the West Midland and roads expected to see the strongest increase in the East Midlands.

Comments left by survey respondents continue to highlight the growing skills shortage, uncertainty caused by the looming trigger of Article 50 and what impact leaving the single market will have on their companies. The result of this uncertainty is being cited as one of the reasons behind dampening investment and cautious projections in activity.

Jeremy Blackburn, RICS head of policy, said: “Many firms are currently having to bring construction professionals in from outside the UK. The lack of quantity surveyors consistently apparent in our survey is also underscored by the fact that, at the moment, under the government’s Shortage Occupation List, it is easier to employ a ballet dancer than a quantity surveyor.

“Even if we were to reverse this and also ensure that through Brexit we maintain access to EU workforce, we would still have a domestic shortfall of skills. The Industrial Strategy is a golden opportunity to align education, training and employer work paths – along with modern methods of construction – to ensure we have the skilled workforce to meet our building targets.”