Autumn 2022 UK Market Report
Site productivity and labour
Contractor respondents’ view of site productivity improved in our latest survey. Nearly three quarters of contractors said that present site productivity on their projects is in the 81–100% range as a proportion of pre-pandemic level, up from approximately 60% on our previous three reports — Winter 2021/22, Spring 2022 and Summer 2022.
The October release of the S&P Global/CIPS UK Construction Purchasing Managers’ Index Total Activity Index replicates this improvement.
Tim Moore, economics director at S&P Global Market Intelligence, said, “Reports of delivery delays for construction products and materials were the least widespread since the pandemic began as greater business capacity and improved transport availability helped to ease pressure on supply chains.”
Issues with labour supply lessened in the third quarter, with six out of ten contractors reporting issues, compared to 88% in our Summer report.
Labour supply remains particularly challenging in some regions — high proportions of contractor respondents from London, the Midlands, Yorkshire and Humber and Scotland reported issues in the past quarter.
Respondents revealed recruitment challenges across most trades, with most mentions for bricklayers, plasterers, steel fixers, cladding fixers and mechanical and electrical installers.
Several of those that responded to our survey also noted that finding people of the right skill level is a challenge, that enhanced rates were being seen and general labour was difficult to find.
Increases in labour rates were noted by 76% of contractor respondents in the past quarter (3Q 2022), down from a high of 96% for the previous quarter (2Q 2022).
Data from Hudson Contract shows that the earnings of self-employed tradespeople were 4.6% higher in August 2022 than in August 2021. Average payroll data shows that average weekly pay reached £972 during August.
Ian Anfield, managing director of Hudson Contract, said, “Demand is being driven by the huge amount of infrastructure work on the go and the big housebuilders, which are reporting strong forward order sales, although recent volatility in financial markets has clouded the outlook.” He also highlighted the longer-term impact of Brexit.
Construction vacancies in 2021 rose to the highest level since records began in 2001 and have stayed at a high level.
There were 45,000 construction vacancies in July–September 2022, equating to 3.0 vacancies for every 100 jobs.
With a strong pipeline of work to achieve net zero carbon targets, for defence and to meet energy security/affordability aspirations, labour will remain a key issue for the construction industry.
Earlier in the year, the Construction Industry Training Board (CITB) warned of a severe shortage of workers across the construction industry in its Construction Skills Network report. It highlighted growth forecasts across the whole of the UK, with sectors such as private housing and repair and maintenance potentially struggling to deliver, due to the shortages.
Overall, the report identified that 266,000 additional workers will be needed by 2026.
The ONS workforce jobs data shows the scale of the challenge — indicating that the number of workers in construction did not quite recover to the level in 2008 before the COVID-19 pandemic. There were 2,371,000 construction workers in September 2008 and 2,365,000 in March 2019.
Whilst labour and skills shortages are long-term issues, Brexit and an ageing workforce add further pressure.
It is hoped that increased digitalisation and changes to the industry brought about by the pandemic will help to attract new entrants to the industry and help to retain staff.
Digital tools and the better use of data will also help to improve efficiency and productivity, making the best use of the resources available.
Some measures which may help with boosting the workforce and improving productivity are:
Implementing flexible working practices
helps people to find more work/life balance and to meet their other commitments.
Using digital modelling and analysing emerging designs
makes design time more efficient and focused.
Applying machine learning to find the best design
helps to highlight mistakes or omissions in a design.
Optimising design for modern methods of construction (MMC)
improves quality and performance, and factory work attracts different workers.
Embracing data and insights
better decision-making and understanding of project performance means that resources can be prioritised to improve outcomes.
Utilising robotics
helps reduce onsite labour requirements and undertake tasks in extreme and challenging environments.
Implementing flexible working practices
helps people to find more work/life balance and to meet their other commitments.
Using digital modelling and analysing emerging designs
makes design time more efficient and focused.
Applying machine learning to find the best design
helps to highlight mistakes or omissions in a design.
Optimising design for modern methods of construction (MMC)
improves quality and performance, and factory work attracts different workers.
Embracing data and insights
better decision-making and understanding of project performance means that resources can be prioritised to improve outcomes.
Utilising robotics
helps reduce onsite labour requirements and undertake tasks in extreme and challenging environments.
