Property: UK building works face labour and supply shortages

·3 min read
Labour and skills shortages continued to hold back the building sector, with almost three-quarters of respondents highlighting this issue. Photo: PA
Labour and skills shortages continued to hold back the building sector, with almost three-quarters of respondents highlighting this issue. Photo: PA

UK building works are set to be hit by supply shortages with the lack of materials impeding activity despite strong demand, according to a new survey.

The majority (84%) of respondents said that availability of materials was a major constraint to current activity in the first quarter of 2022, the latest data from RICS Global Construction Monitor revealed.

Labour and skills shortages also continued to hold back the sector, with almost three-quarters (74%) of respondents drawing attention to this issue.

Skills shortages were highlighted both across the trades and in white collar roles with 66% having difficulties in recruiting skilled bricklayers and 63% struggling to find carpenters. More than half (56%) of respondents identified a problem in sourcing quantity surveyors.

Factors limiting building activity. Chart: RICS
Factors limiting building activity. Chart: RICS

This is despite 34% of respondents reporting a rise in workloads in the first quarter – a slight rise from 33% in the final quarter of last year.

A continued focus on infrastructure projects is driving the rise in workloads, with a 41% more respondents cited a rise in this type of construction.

Commitment to energy infrastructure was particularly strong, clocking in the highest increase in this sub-sector since records began, with more than half (53%) seeing a rise in workloads.

The net balance for private residential construction came in at 38%.

Regionally, the North East, Yorkshire and North West saw the strongest pick-up in workloads with 41% of respondents reporting a rise.

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Looking forward to the rest of 2022, the Midlands and East of England expect the largest improvement in activity, with almost half of respondents (47%) anticipating growth.

Optimism within the sector remains strong for the coming year, but respondents dialled down their forecasts for profit margins. The net balance in the first quarter of the year dropped to +1% down from +10% in the fourth quarter of 2021.

Some 42% more expect credit conditions to worsen over the next year – the weakest net balance since records began.

RICS chief economist, Simon Rubinsohn, said: “The good news in the latest report is that the industry remains positive about the outlook for activity and that the generally upbeat mood can be seen not just in regard of infrastructure and housing development but also in the commercial sector.

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"However, it is clear that the sector faces significant challenges which have been reflected in recent official data showing a sharp rise in vacancies across the construction industry. RICS numbers demonstrate these shortages are pretty much across the board including quantity surveyors and project managers as well as both skilled trades and more general labour.

"This, combined with problems around accessing building materials in the current environment, is exerting significant upward pressure on construction costs at the present time.”

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