Skills shortages threaten construction upturn

Plans to tackle the nation’s housing crisis and build a million new homes are unlikely to provide an immediate boost to construction sector because skills shortages are still putting a break on growth.

That’s the view of industry experts in the wake of last weeks’ announcement from housing minister Brandon Lewis that the government has set a target of building one million new homes over the next five years.

The proposals are designed to tackle the deficit shown in figures from the National Housing Federation. Fewer than 460,000 homes were built between 2011 and 2014, despite forecasts that 974,000 houses were needed.

The government announcement came at the same time as a survey from Lloyds Banking Group which found that around a third (35%) of construction companies are struggling to find candidates to fill skilled job vacancies such as electricians, quantity surveyors and site managers.

It spoke to more than 100 construction companies which report that while growth is accelerating, skills remain the biggest challenge.

Some 87% of firms said they want to take on new construction professionals over the coming year, with around 100,000 vacancies set to become available; with white collar management and blue collar tradespeople amongst the sought-after staff.

“There are efforts being made to tackle skills shortages but everyone recognises this issues is inhibiting the ability to maximise on the growth opportunity and is also causing serious cost inflation in the labour market,” says Martyn Makinson, managing director of construction recruitment business Ionic.

“The trouble is that the recession cut the industry to the bone and removed a lot of skills and overall capability to deliver construction projects. You can’t repair that damage overnight and the concern is that the construction industry is not recovering fast enough to keep pace with demand.”

Makinson added: “It is an irony of our times that after enduring tough market conditions for so long the construction and housing sectors are now struggling to take advantage of the upturn. It’s good to see that the likes of the Construction Industry Training Board are making efforts to address this issue with apprenticeship programmes but in the meantime there are things that firms can do right now.

“In a candidate-driven recruitment market construction companies need to present themselves as attractively as possible. Construction companies must sell themselves to a candidate by focusing on benefits, company culture and development opportunities which, in my experience, are often far more attractive than salaries."

The new government targets come at a time when the supply of homes for sale has plunged to its lowest levels since records started 37 years ago, according to the Royal Institution of Chartered Surveyors (RICS). It says the acute shortage of supply of homes for sale is continuing to push house prices higher.

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