Image: Dreamstime.com
The construction industry’s labour costs are continuing to climb steeply, according to the first state of trade survey for 2016 by Build UK.
Some 43% of contractors reported an increase in labour costs during the first three months of the year compared to the previous quarter, the research for the industry’s largest contractor trade body showed. Two thirds said labour costs were higher than a year ago.
Contractors reported widespread difficulties in recruiting supervisors, managerial, professional and technical staff along with bricklayers and cladders. The main reasons stated for the difficulties in filling vacancies were the low number of applicants with their required skills (53%), a lack of required experience (53%) and a lack of qualifications (48%).
The survey, carried out by data analyst Glenigan, also found that 39% of contractors reported all building costs higher in 2016 Q1 compared to the previous three months.
Even so, contractors remain positive about their future prospects with 27% expecting workloads to rise during the next quarter. Industrial and commercial sectors are identified as particular growth areas, and the majority (52%) of contractors expect workloads to rise over the next 12 months.
However, 26% expect their work volumes to decline, compared to just 9% last quarter, which suggests that the overall pace of industry growth will be slower than previously anticipated.
In terms of payment, half of contractors reported waiting at least 46 days on average, despite only 20% having average contract terms of 46 days or more.
Build UK chief executive Suzannah Nichol said: “There continue to be mixed messages in terms of growth, however, industry intelligence shows increasing levels of activity over the last quarter. Employers are experiencing both rising material and labour costs as they head towards maximum capacity and this continues to highlight difficulties in recruiting appropriate skills at all levels.”
