Labour

For a second consecutive quarterly survey, we have seen a considerable reduction in contractor respondents noticing labour supply issues. Only 15% said they had, the lowest since we began monitoring the response trend in 1Q 2021.

While that indicates a picture of overall improvement, some issues persist, and the anecdotal feedback from our survey illustrates this. Particular challenges seem to remain in mechanical and electrical (M&E) trades. Respondents are noting the increasing difficulty in obtaining work package tender returns for building services as well as the difficulty of finding skilled M&E site operatives to undertake existing workloads.

Payroll firm Hudson Contract noted recently that M&E workers had seen pay packets rise by 21% on previous months in February, up to an average earning of £1,233 per week. High-rise schemes in London, Birmingham and Manchester led to increased rates. However, a dwindling skilled workforce seems to be another key reason.

Other than M&E operatives, at site level there are also difficulties locating adequate resource for groundworks trades, bricklayers and carpentry according to our survey respondents.

Interestingly, a number of respondents also flagged significant issues in attracting people to take up professional roles across several disciplines. M&E engineers, surveyors, specialist safety consultants and landscape architects were all identified as problematic.

One piece of anecdotal evidence also flagged that various projects with a Tier 1 contractor are resorting to booking labour well before it is required. This proactiveness can sometimes cause issues as project delays will impact when certain operatives can undertake their role, which could lead to main contractors having to pay twice for labour and claims for inefficient working or loss of profits from the supply chain.

On that same note, a recent Building Magazine article saw a Tier 1 Scottish-based contractor note that profits fell by more than a fifth last year. It identified inflation and labour shortages as their main headaches, which they expect to remain a weakness.

Two-thirds of survey respondents do not think it will be possible to recruit and retain enough people to fill the gap that will be left by skilled tradespeople leaving the industry. Recurring anecdotal evidence from respondents provides a strong suggestion that people in the industry do not believe enough is being done to make construction apprenticeships appealing to school leavers.

Respondents also felt that meeting the labour demand would require an overseas labour workforce injection, which has become more complicated in a post-Brexit Britain. Several respondents also flagged the wages available to potential apprentices as a deterrent for entering the industry.

The Construction Industry Training Board (CITB) recently produced its 2024–2025 business plan, with one aim to support those joining the industry. The New Entrant Support System (NEST) aims to help employers, particularly smaller ones, to navigate recruitment processes, access grants and identify suitable training for recruits.