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Construction jobs to fall until 2016

A worsening crisis of underemployment is gripping the UK construction industry, raising fears that job cuts could continue well into the recovery. 

A major report has found that despite 60,000 jobs being lost in UK construction during 2012, current employment levels are unlikely to be maintained. 

Recruits needed to meet demand in regions

Recruits needed to meet demand in regions

A 9 per cent fall in output in the same year means the gap between work and job numbers has been widening in many regions. 

The findings, revealed in the Construction Skills Network annual report, mean that lay-offs may have to continue, even if work levels pick up. 

In some regions, such as Northern Ireland and Yorkshire and the Humber, output has fallen about 15 per cent faster than employment in the past five years.

In the North-west, the fall in output (29 per cent) outstripped a fall in employment of 11 per cent. 

“Skills are a long-term gain – you can’t turn the tap on and off,”

Wates chairman and chief executive Paul Drechsler

Austerity cuts and private sector weakness have seen the industry slump back to 2009 output levels, with many firms moving from direct employment contracts to temporary work. 

An expected 3 per cent output slump this year will further widen the gap between output and employment.  

Employment is set to decline across the country until 2016, particularly in the West Midlands and North-east, when national construction employment is forecast to drop to 2.36m – its lowest level since 2000. 

Owen Goodhead, managing director of recruitment firm Randstad, told CN that temporary workers were working about three hours fewer per week on average as belts are tightened. 

He added that clients were “locking in” their existing workforces as many workers left the UK for emerging markets with clearer work pipeline,

“There’s a very strong retention strategy out there in the marketplace,” he added. “To make money on a job which has a very, very slim margin, you need the best project team.” 

Only London and the East of England are set for an overall rise in employment. 

Some regions, such as the North-east and Northern Ireland, have deceptively high output figures, as steep output drops of around 30 per cent mean industry is starting from a lower base. 

Meanwhile, the bulk of Welsh demand is counting on the prospective Wylfa nuclear project. 

The North-west, Midlands and Yorkshire and the Humber are all set for output declines every year until 2017.

However, the CITB research shows some trades will be in higher demand as the profile of available work across the country changes, and as the industry seeks the 29,050 recruits needed each year to meet new demand (see map - click to enlarge). 

The most sought-after trades in coming years are set to be wood trades and interior fit-out, civils workers, architects and plant operatives. The smallest employment growth is forecast for plant mechanics, steel erectors, bricklayers, electrical tradesmen and surveyors. 

Wates chairman and chief executive Paul Drechsler told CN it was “difficult to see” how industry could build up the skills required to meet upcoming infrastructure requirements, especially in the energy sector. 

“Skills are a long-term gain – you can’t turn the tap on and off,” he said. “The real question is, when you start to meet the needs of the nation, will you be able to get into production the skills required when required?” 

Mr Drechsler added that government investment decisions had to be accelerated to provide clarity: “There are plenty of opportunities in the southern hemisphere – are you going to tempt them back?” 

The changing pattern of work comes on the back of 20 per cent declines in public housing and non-housing work in 2012, as well as a 10 per cent contraction in commercial and a surprise 15 per cent drop in infrastructure work. 

Private housing, industrial work and repair and maintenance are set to recover most steadily over the next five years. 

CITB-ConstructionSkills deputy chairman Judy Lowe said the lag between employment and output may help the sector recover. 

“There’s a lot of potential to meet new demand,” she said. “There’s a lot of latent unemployment in there – in previous recessions the two figures have tracked each other.” 

Ms Lowe thinks the best way to get the industry’s 150,000 unemployed back into the workforce is through housing and road repair and maintenance schemes: “That’s the kind of thing you could start tomorrow.” 

She said re-fitting the housing stock to provide much-needed energy efficiency improvements was a “no brainer” in helping to boost employment. 

CN understands CSkills will be pushing for finance to be unlocked for road and housing R&M projects, as well as project delivery, when it meets ministers and civil servants at 11 Downing Street this week. 

Employee relations firm Acas managing director Adrian Wakeling told CN that firms were using underemployment to adapt. 

He said switching workers to temporary contracts and using them less “allows employers to hang on to valued and skilled staff”, but warned there might be a challenge in managing the expectations of employees who expected full-time work when orders recovered.

 

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