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Construction backlog 'needs two million people in five years'

The construction industry would need to recruit 400,000 people a year to meet the country’s needs up to 2021, according to a report by consultant Arcadis.

The Arcadis Talent Scale study said two million people would have to join the sector over five years if a housing and infrastructure construction backlog was to be overcome. 

This was based on the industry delivering government targets on housebuilding as well as major infrastructure programmes.

Housebuilding is the primary driver behind the projections, with Arcadis calculating that nearly 371,000 recruits a year will be needed to meet housing targets, while infrastructure projects will require around 36,000 annually.

The consultant said skills shortages could lead to higher labour costs and combine with already rising material costs to push up construction prices and jeopardise output growth.

“The skills shortage is limiting capacity and it’s probably going to get worse before it gets better,” said Arcadis director of workforce planning James Bryce, who worked on the report.

Electricians, plumbers, carpenters and joiners were highlighted as being in very short supply.

Arcadis attributed the shortage in these areas to a perfect storm of fewer apprentices, a large number of over-50s leaving the workforce, falling migration and rising demand.

Mr Bryce said this problem had developed over many years because of a change in approach to work.

“Over the years we’ve seen an increase in people seeking white-collar work, [with] a lot of the shortfall in construction labour being backfilled with workers from abroad.”

The report separately predicts that a ‘hard Brexit’ scenario would see 214,000 fewer EU nationals enter UK construction by 2020.

This additional shortfall would have a nationwide impact, the consultant says the problem will be more acute in London and the South-east, where demand for new housing is at its highest.

These two regions alone account for 27 per cent of the additional labour that will be needed for the housebuilding sector. 

A skills shortage in certain trades is likely to see those trades that are most in-demand requiring higher wages, the report suggested.

This would add even more pressure to input costs which recently rose at their fastest rate since 2008, according to the construction Purchasing Managers’ Index.

Mr Bryce said: “We need to be thinking on a longer timeframe.

“Some infrastructure projects being prepared now won’t be built for another 10 years, and the people who will be working on those schemes are in their teens.

“The National Skills Academies are the first step, but we need to start attracting the next generation of workers now.”

Arcadis made three recommendations for plugging the skills gap in the short term: recruiting from other industries; redeploying older workers into supervisory roles that allow them to pass on their skills and knowledge; and a review by the industry of how labour is organised and time is spent throughout the supply chain aimed at reducing waste.

Readers' comments (1)

  • Did Arcadis read the Farmer Review?

    I know yesterdays paper is Fish and Chip wrappers, but it was quite an important paper with Government support and only a few months ago.

    Shocking.

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