Labour availability and rates

Fairly consistent levels of contractor respondents of between 55–65% have reported issues with labour supply since our survey reviewing 2Q 2022, where 88% said there were challenges.

Contractors reporting labour rate rises have also been similar for the past few surveys. Since 4Q 2022, between 80–90% have said there have been increases in the quarter. The cost of living crisis, driven by high inflation, continues to have an impact.

Data from the ONS shows that average not seasonally adjusted construction weekly earnings increased by 4.2% in the year to May 2023.

Sourcing particular roles remains challenging, with survey respondents highlighting pre-construction staff, planners, skilled trades such as bricklayers and joiners, as well as unskilled labour. Also highlighted were shortages of consultant resources, particularly those chartered.

Some feedback from the survey is the pressure of major programmes of work such as Hinkley Point C and HS2 enticing the same resources. Others reported particular challenges in some regions, such as in Northern Ireland, where there are pressures due to high domestic demand, but also the lure of better rates of pay in mainland UK and the Republic of Ireland.

Whilst ONS data shows that construction vacancies have reduced to 39,000 in April–June 2023 from 49,000 in August–October 2022, they remain elevated compared to historical levels.

Skills shortages and a declining construction workforce are familiar issues; training and attracting new talent to the industry remain in focus.

The CITB recently launched a fund for CITB-registered employers to apply for up to £500,000 for innovative solutions to tackle skills challenges. It allocates money to target productivity to ensure delivery of the expected demand for construction over the coming years. It also aims to encourage equality, diversity and inclusion to make the construction industry a more appealing career choice to more people from various backgrounds. The body is looking for scalable and sustainable ideas.

In July, the Flexible Working Bill passed its third reading in the House of Lords and achieved Royal Assent, becoming law. All workers have the legal right to request flexible working from day one across all industries. Sir Robert McAlpine supported the Flex Appeal, fulfilling its commitment to lead by example on inclusion and to inspire industry-wide change, highlighting benefits such as improvements to mental health and a more productive and committed workforce.

Whilst progress continues on training, there is a concern about short-term requirements. Earlier in the year, the government took the unprecedented step of accepting recommendations from the Migration Advisory Committee for five construction occupations, including bricklayers and plasterers, to be added to the “shortage occupation list”, enabling overseas labourers to apply for a skilled worker visa to work in the UK. Construction News highlighted calls from the Construction Leadership Council for adding more trade roles to the list due to the difficulties employers face in filling vacancies.