Winter 21/22 UK Market Report
Site productivity and labour
Contractor respondents' estimates of present site productivity improved in the last quarter versus pre-pandemic levels according to our latest survey, with all respondents reporting site productivity within the 61-100 percent range. In Autumn 2021 issues with deliveries and materials availability were impacting site progress, however, these issues have more recently improved, and this trend has also been noted by other industry analysis. The ONS noted the easing of supply chain bottlenecks for certain products and the IHS Markit/CIPS UK Construction update noted that supplier lead times lengthened to the least marked extent since November 2020 at the end of 2021.
Issues with labour supply continued in the last quarter of 2021, with 80 percent of contractor respondents reporting issues.
Respondents noted issues across most trades and also with consultancy staff. Shortages of people for commercial roles, including quantity surveyors and commercial managers, were noted by many respondents.
Increases in labour rates were noted by 70 percent of contractor respondents in the past quarter (4Q21), down from 93 percent for the previous quarter (3Q21). Building Magazine’s contractor’s salary survey for 2022, which was conducted in conjunction with Hays, found that salary increases and demands for staff intensified in the latter half of 2021 as lockdown restrictions eased and workloads increased.
From our respondents, 32 percent think that the industry will learn to live with labour shortages with increased efficiencies from the utilisation of MMC and technology to reduce labour requirements. It is also hoped that over time there will be new entrants to the industry and increased training. However, in the short term, it is likely that labour shortages will impact the industry particularly as strong construction growth is forecast. It is likely that labour issues will become the key driver for cost increases in 2022, over materials.
