A recently released report further warns that any election manifesto pledges on housing or infrastructure will be deemed “redundant” if there are not enough workers in the construction industry.
The report by the Federation of Master Builders (FMB) explained that migrant labour from the European Union is crucial to the sector and called on the next Government to ensure that construction companies have enough skilled workers post-Brexit.
“We’ve been experiencing a severe shortage of bricklayers and carpenters for quite some time – these latest statistics show that skills shortages are now seeping into other key trades such as roofers and plumbers,” said Brian Berry, Chief Executive at FMB. “This growing skills deficit is driving up costs for small firms and simultaneously adding to the pressure being felt by soaring material prices linked to the weaker pound.”
The report further pointed out that more than half of the industry’s workforce in London alone was made up of non-UK nationals.
The forecast from industry experts pre-Brexit was that they expected these labour shortages if Britain chose to leave the EU. A previous post featuring research from the Royal Institution of Chartered Surveyors (RICS) said that the UK construction industry could potentially lose almost 200,000 EU workers (eight per cent) post-Brexit.
The same article warned that the labour shortages could put the UK’s predicted £500bn infrastructure pipeline at risk.
“If the next Government implements an inflexible immigration system that hinders the ability of talented foreign construction workers from making their way to the UK, any manifesto pledges relating to the delivery of housing and infrastructure will be rendered meaningless,” Mr Berry explained.
Temporary three-year visas may help plug the UK construction skills gap. This can help businesses with training local workers to fill vacant jobs. However, it will not allow EU workers to claim in-work benefits, tax credits, or housing benefits. The visa will also prevent them for obtaining permanent residence.
Expensive imported materials
In addition to the labour shortages, industry leaders also predict a shortage of construction materials or an increase in costs.
Trading between the two territories will have to be ironed out as Brexit is expected to make a large impact on the foreign investments in the nation’s businesses. FXCM explained in a post on ‘what Brexit Means for the UK and Europe’ that if the former manages to establish a free trade agreement, then it could lose FDI equal to 2.2% of its gross domestic product. Meanwhile, if there are no secure trade terms, then the FDI will suffer a drop equal to 6.3% and 9.5% of its GDP.
“Our current assessment is that leaving the EU would be likely to impose substantial costs on the UK economy and would be a very risky gamble,” according to the Centre for Economic Performance at the London School of Economics.
Due to material shortages and high costs, supply chain issues rose and there’s an evident slow growth trajectory.
Duncan Brock, director of customer relations at CIPS, said: “Suppliers were challenged as they groaned under the weight of high demand and some material shortages, with the sharpest drop in performance since June 2015. This impacted on the sector’s overall pace of activity.”
Although challenged, the sector remains optimistic with high concerning growth prospects for the coming years. Construction output is projected to rise annually in the next three years, by 1.3% this year, 1.2% in 2018 and 2.3% in 2019.