As the country drags itself out of the most extraordinary period in it’s post-war history, you’d be forgiven for thinking that the outlook for construction in the UK was likely to be pretty gloomy.  However many key players in the sector are far more optimistic than they were even 12 months ago.

We’ve started to see a reduction in consumer price inflation, interest rates are showing their first signs of coming down from 16 year highs and we have a new government that is promising some pretty hefty investment in infrastructure projects.  This is in addition to their pledge to invest over £8 billion in energy projects and a promise to build 1.5 million new homes over the next 5 years. You can read pbc Today’s summary of the Labour manifesto promises for construction sector here.

Sustained growth

Building costs are widely forecast to increase by 15% over the next 5 years and tender prices are expected to rise by 19% over the same period, however, growth is expected to return in 2025 with total work output increasing 20% by the second quarter of 2029.

Planning reforms

One of the key drivers of growth in the construction sector is the planning reforms being promised by the new administration.  Many studies link housing completions to positive GDP growth.

Red tape is currently a major barrier to growth and with the reforms not just being confined to housing, the changes promised in the public sector will allow quicker decision-making across all infrastructure projects.

Skills Shortage

There is currently a skills shortage in the industry and the Labour Party have pledged to address this issue via their new body Skills England.  Between 2017 and 2022, the skills shortage has increased to half a million and now accounts for 36% of job vacancies.

The government’s plan to increase the number of apprenticeships being offered, together with a renewed focus on aligning levy-eligible training with the sector’s requirements should go a long way towards plugging the gap.

Recruitment

This is where the picture is a little less rosy.

Over 82% of recruitment firms reported recruitment problems in Q2 this year, up from 67% in the previous quarter – mostly as a result of increased demand and the skills gap reducing the number of suitable candidates.  Brexit has had an impact as thousands of foreign construction workers have left the UK to work in Europe.

The CITB (Construction Industry Training Board) has forecast that the sector needs to recruit an additional 251,000 construction workers over the next five years to meet the government’s targets, with construction employment rising to 2.75 million in 2028.

The Prime Minister is meeting with European Leaders, to “reset” relationships with European Nations, starting with Germany this week. One of the subjects for discussion will be how to address movement of skilled workers across European borders.

Hopefully, this new approach to Europe, together with the plans being announced since the General Election will go a long way to closing the skills gap and increasing the supply of labour into the construction sector.

What can Meades Umbrella do for construction workers?

As part of our continued expansion plans, Meades Umbrella has launched Meades CIS.  This is a payroll service aimed at self-employed contractors, working in the construction industry who qualify for payment under the CIS scheme. 

We have Gross Payment status and work with many construction recruitment agencies which means we can simplify the payment process for contractors.  We also offer a full self-assessment service via our sister company, Meades Contractors.

To find out more about Meades Umbrella’s new CIS service, click here.  https://meadesumbrella.co.uk/cis/