Almost nine in ten construction professionals say labour shortages are having a negative impact on projects, according to the latest Market Report from Gleeds
More than half of those surveyed said skills and labour shortages were having a moderate or severe impact on project delivery, while another 34% reported minor effects on programmes.
Commenting on the report, Andy Ellis, managing director at Gleeds UK, said: “The economic backdrop remains fairly volatile as a result of continuing global unrest and relatively high inflation and interest rates, issues which consistently come to the top of our list of concerns for the construction sector.
“A lack of investor confidence was third, while low consumer confidence was also noted by more than half of those quizzed as contributing to an overall decline in construction activity this quarter.”
Mechanical and engineering face the biggest labour shortages
Mechanical and electrical (M&E) trades are proving particularly difficult to recruit. More than a third of respondents identified a shortage of M&E workers as the trade having the greatest impact on project delivery and productivity, ahead of bricklayers, carpenters and groundworkers.
With demand for M&E expertise continuing to grow, a labour shortage of skilled professionals is becoming an increasing concern for both contractors and clients.
Global conflict affecting product pricing
“Meanwhile, the ongoing conflict in Iran continues to cause problems for those operating in the built environment, with almost 80% of the people we surveyed reporting seeing its effects across commodities and pricing on projects,” Ellis explained.
He added: “All of these influences taken together will inevitably be driving the return to a more defensive tender pricing strategy – with 51% of respondents claiming to have noticed a reduced appetite for risk from contractors over the previous quarter and a third describing tender pricing behaviour as ‘cautious’.”
Construction businesses are hopeful for the ‘Burnham boost’
More positively, ahead of Andy Burnham’s first Budget at the end of the month, the report also revealed that around a third of construction professionals are hopeful that his government will be broadly good for the sector in the long term, while 38% believe recent changes to the National Planning Policy Framework will serve to unlock developments.
