A shortage of skilled workers in the South West is hitting the region’s construction industry and potentially holding back essential infrastructure and building projects, according to a new report.
Some 44% of construction firms in the South West are witnessing a lack of staff with the right skills, triggering above-inflation pay rises, according the latest UK Construction Market Survey staged by RICS (Royal Institution of Chartered Surveyors).
The survey, for the final quarter of 2015, shows labour shortages were viewed by 66% of construction professionals across the UK to be the most significant barrier to growth in the last quarter of 2015. 
In the South West 44% of respondents agree there is a skills shortage. Quantity surveyors are particularly in short supply with 57% of survey respondents citing a shortage of these professionals. However only 38% reported problems in finding other construction professionals compared with the national average of 52%.
While workloads increased over the quarter – a net balance of 24% of South West respondents were busier – the pace of increase had slowed over the past two years.
Public sector housebuilding was the hardest hit section of the market – despite ever-growing demand for social housing. Workloads decreased for 10% more firms than those witnessing an increase over the quarter.
However, this failed to dampen overall confidence levels among the region’s construction firms with 54% more respondents expecting a rise rather than fall in workloads during 2016.
Nationally, skills shortages resulted in average construction earnings rising by more than 6% in the year to October – a marked increase on the average UK wage rise over the same period of under 2%. RICS warned that this could jeopardise some of the Government’s biggest housing and infrastructure programmes.
Both input costs and output costs are rising for South West building firms, according to the survey – with input costs rising at a faster pace.
Across the UK net lending to the sector fell by a further £274m during the quarter and nearly two-thirds of firms highlighted continuing issues around financial constraints. However, despite these concerns, 33% more respondents in the South West said that they expected profit margins to rise this year than fall.
RICS chief economist Simon Rubinsohn said: “While workloads are still growing at a relatively healthy pace, labour shortages in the construction sector are causing delays at different stages in the development process and leading to significant problems with project planning.
“More than 60% of our survey respondents said that these resulting planning delays were an impediment to growth.
“That said, industry wages are becoming increasingly attractive and I would hope that over time this will encourage skilled wor
kers to return to the sector, as well as drawing school leavers and graduates towards construction industry careers.”
RICS future talent director Sally Speed warned that some of the Government’s key housing and infrastructure programmes could soon face crippling delays and spiralling costs because of skills shortages in the construction sector.
“To tackle the problem, Government must deliver a new skills strategy that will enable industry, unions, and educators to work together and deliver real solutions,” she said.
“Apprenticeships alone will not be enough. Ministers must look to draw a link between education, future careers and skills. Employers need to take the lead in improving skill levels, providing more vocational pathways to work and actively engaging with our country’s schools and colleges.”
Craig Davidge, South West ambassador for the Association of Executive Recruiters and managing director of Bristol-based Rosemont, pictured above, which specialises in senior level recruitment in the construction sector, said: “The skills shortage is not going to go away in the foreseeable future.
“For construction organisations to achieve their business objectives they are being forced to attract high level, experienced candidates with a hefty price tag, creating this ‘supply-and-demand’ scenario, hence the above average salary increases reflected in the survey.
“We are also seeing more and more mid to senior level managers opting to go self-employed because they are happy to take the risk in such a buoyant marketplace, and picking and choosing assignments.
“That’s why there is a definite and much needed shift in direction in the way business is starting to approach job searches – just throwing more money at candidates isn’t a sustainable solution.
“Good candidates will want a total package that enhances their careers and their personal lives. There has to be a longer term strategic approach to recruitment.
“As long as I have been in this business, there has been a skills shortage, we’re just talking about it more openly now. RICS is right, until we address more fundamental issues around encouraging young people to enter professions such as construction, we will never be self sufficient as a national workforce.”
