EU Uncertainties Impact UK Construction

The UK construction market is buoyant and expected to increase output over the next couple of years by more than 13%. This is the estimate of growth according to the Construction Products Association (CPA).

They forecast that the industry will have marked up an even bigger rise by 2019 of around 21%. The majority of the increase, the CPA say, will be down to the private housing sector, though infrastructure will play its part too.

If We Came Out of the EU

However, this doesn’t take into account the affects that might impinge if the EU referendum - due to happen by 2017, votes us out of the European Union.

Currently, employment in UK construction and engineering is still considerably lower than at its peak in 2008 and if we leave the EU, the biggest rebound is expected to impact labour in the industry.

Skill Shortages

Currently the construction industry tops the charts for the most affected by a lack of skilled personnel. Yes the construction industry takes joint first place out of nine industries.

So with the UK still experiencing skill shortages much of the workforce is currently filled by workers from Europe and particularly Eastern Europe. In fact, the number of workers from these countries working here has increased by 37% in the last two years - although this is across every industry not just construction and engineering.

If the UK does not remain in the EU, the shortage of skilled labour will be felt and it will be too early to feel the benefit of any of the apprenticeship schemes currently being put into place. If this is the case how can the industry grow, deliver projects on time and remain competitive?

There is talk that a points system will be introduced which will allow migrant workers to come over to work in certain circumstances. It is thought the lack of skilled workers might qualify for this which would hopefully mean that the construction and infrastructure industries in the UK would not take a big hit. But as yet nothing is clear and no one is prepared to stick their necks out and say which way they think the vote will go.

One man who is prepared to make a stand is David Balmforth, President of the Institute of Civil Engineers, “Coming out of the EU would induce economic instability. The construction industry is linked to the financial wellbeing of the country and anything that destabilises the country would destabilise the construction industry.”

Other Influences of EU Membership

Many projects of course have been influenced by compliance with EU rulings. Thames Water has explained that one reason behind the controversy of the Thames Tideway Tunnel has been to do with compliance with the Urban Waste Water Directive.

The On-going Impact of Skill Shortages

In the long-term, lack of skilled workers will not improve overnight. If we have to depend on local labour to fulfil the roles this will most likely impact on either the cost of projects or their profitability. In turn this can lead to reduced investment for the industry.

The only way to up the ante is to be more productive according to Simon Rawlinson, head of strategic research at asset consultants EC Harris. He also highlights the fact that employment in the UK construction industry has fallen drastically and yet there are less unemployed than this would indicate. So if the industry is contracting but growth is expected, something somewhere has to give. His answer is in productivity across the board at all levels within the industry.

Some consider that the lack of skilled workers, the retiring population in the industry and the lack of young workers coming into construction is one of the main reasons why jobs aren’t finished on time and why the cost of delivering a project goes up. Is this why some of the infrastructure projects failed to meet their deadlines and why the government addressed this in their summer budget?

Filling the Gaps

What we do know is that there are still plenty of opportunities to secure positions in the industries as Quantity Surveyors, planners, project managers and engineers. We have almost 400 positions available in this still buoyant market. So if you want to do help ensure the industry stays on course and ups productivity, you can ensure that you are doing your bit in one of these roles.

Why not take a look at the job opportunities in the UK and make sure you have sent us your CV so you don’t miss out on future opportunities.

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Steve Thomas
Director - Hong Kong & UK Construction Recruitment Specialist
Maxim Recruitment