Labour

In 4Q 2023, fewer contractor respondents reported issues with labour supply and increases in labour rates than in previous surveys.

Feedback suggests that in some regions, trades such as bricklayers, carpenters, plasterers and the like have started to become more available due to the slowdown in the residential sector.

Hudson Contract found an 11% fall in the number of payments made to tradespeople by brickwork contractors in October 2023 compared to the same month in 2022. However, it highlighted that average pay rates for bricklayers continued to rise as experienced workers were kept on at the expense of trainees. This is a concern for the industry longer term.

However, some areas continue to experience challenges with labour availability; for example, Northern Ireland faces pressure from competition for higher wages in the Republic of Ireland and the UK.

In line with previous reports, survey respondents flagged difficulties with specialist mechanical and electrical trades such as fire, access control and lighting. Some also raised concerns about an ageing workforce affecting their sector.

There were also comments regarding higher wage expectations, particularly for consultancy and site project engineer/manager roles, due to the elevated cost of living. One respondent highlighted the pressure on graduates with elevated rents skewing salary requirements.

Engineering construction workers recently secured a 17% pay rise. More than 3,000 workers covered by the National Agreement for the Engineering Construction Industry (NAECI) called off industrial action at Stanlow, Fawley, Valero, Grangemouth and Mossmorran oil refineries as well as at the Sellafield nuclear facility accept the pay deal for an additional 11.3% for 2024 and 5.5% for 2025, along with improvements to sick pay and other allowances.

Whilst ONS data shows that construction vacancies have reduced to 36,000 in October–December 2023 from 50,000 in August–October 2022, they remain elevated compared to historical levels.

Skills shortages and a declining construction workforce are issues continuing to weigh on the industry.

In addition to UK demand for infrastructure and energy projects, plus retrofit projects for the transition to net zero carbon, global demand also increases competition for workers. For instance, the mission-critical sector is particularly booming in Europe and will see further sector growth due to AI.

Plans to change the baseline minimum salary for sponsorship of a skilled worker visa and the Shortage Occupation List cause concern that they will further strain the availability of skilled labour.

Although the wider economic pressures cause companies to be lean, investment for the future is essential to replace retiring workers and ensure sufficient skills and capacity to meet demand.

A report reviewing how to do this was recently released. Boosting Routes into Industry reviewed survey responses from employers looking at various elements such as vocational qualifications and vocational training, a skills system, developing the CSCS scheme to support the new verification of competency under the Building Safety Act and taking a leading role in increasing diversity and showcasing the benefits of working in construction.

The industry also calls for a committed government pipeline to enable the required investment in people, skills and training. While the recently published National Infrastructure and Construction Pipeline was positively received, it does not provide longer-term certainty, particularly as the general election may bring another government with different spending plans.