It feels like the construction sector is going through a period of constant evolution today – and the reality is that this isn’t far from the truth. From the changes in the cost of raw materials to the opening up of skills gaps and the innovation that many are relying on to help solve some of the biggest challenges today, there is no doubt that everything is moving at an advanced pace. So, what do you need to know about these key issues?
Demand for skilled construction workers is rising
In the post-pandemic world, the construction sector has made a fast recovery and this is driving up the demand for skilled construction talent. In fact, this year construction is predicted to reach levels of output that are the same as in 2019, before COVID-19 was even on the radar. As projects restart and pick up pace once again there is a real demand for workers right across the construction sector. According to the most recent figures, this is going to result in the need to recruit 217,000 new workers into the industry by 2025 just to keep up with current demand. Demand is likely to spike right across the UK but there are some areas that will feel the pressure more than others, such as the West Midlands, which forecasts show will see a 1.7% rise in the need for construction workers. In addition to post-pandemic recovery, other reasons for this rise in demand include projects like HS2 and expansion of infrastructure and private housing construction.
Some trades are going to be more in-demand than others
Not every constriction trade is going to be equally in demand through 2022 – some are much more sought after than others. Carpentry and joinery, for example, is one of the most in-demand right now thanks to the obsession with home improvement during lockdown (in the UK we spent £110 billion on it in 2021). Metalworkers are also increasingly in-demand – and this part of the industry might be facing its own mini crisis. 80% of metalworkers believe that it’s necessary to do more to encourage new workers to join the sector. 42% say that they think the industry is in jeopardy if the current skills shortage isn’t tackled. Electrician is another key construction trade with 15,000 more skilled electricians required by 2024 to keep up with demand – it’s also one of the most popular trades and a goal for many new recruits. Those with expertise in skilled wood trades are highlighted by the CITB as likely to be the most in-demand in the near future. This includes a wide range of different skill sets, including cabinet makers, wood machinists and furniture finishers. Together, these are the people who keep construction supplied with everything from furniture to flooring.
The rising cost of raw materials isn’t going to drop any time soon
According to research from April 2022, an overwhelming majority of businesses supplying construction raw materials are now being affected by spiralling costs. As a result, the costs that we’ve seen affecting raw material products in recent months and years are just going to keep rising. The Construction Products Association recently polled manufacturers and all of those who took part in the survey reported that they had experienced a cost increase during the first quarter of 2022. These are some of the specific costs where there has been a noticeable shift:
- It won’t surprise anyone to learn that energy costs have been a big factor for many businesses this year.
- At the same time, fuel prices have also experienced an upward trend.
- Raw materials have increased in cost since 2021.
- Higher wages are now a significant expense for many employers, especially given the Great Resignation post-pandemic and the need to attract and retain talent.
- Tax and exchange rates are also having an impact.
From Brexit to the Ukraine-Russia conflict there are a myriad of reasons behind these price spikes, none of which is particularly predictable. However, given that construction demand is likely to remain strong there is hope that a brighter future is just around the corner as the sector continues to recalibrate. Those businesses with the most to worry about tend to be SMEs. Smaller businesses are inevitably less insulated against this kind of disruption and less able to be flexible and agile in the face of change.
Has a solution to the housing crisis been found?
The UK’s housing crisis has been a point of deep embarrassment for successive governments, as it highlights how much house building has slowed down since the 1970s. We’re now in a difficult position where demand vastly outstrips supply and rents are spiraling. One solution being suggested to this is modular construction.
- How does it work? Modular construction is created from components that have already been built to size off-site in a factory. These components can be transported to residential construction sites and assembled more quickly than building from the ground up.
- What are the benefits? Modular construction of homes takes around half the time of traditional construction and many also cost significantly less. Building standards can be used to ensure that specific requirements are being met. Modular construction can also make it easier for the industry to meet net zero targets, as more environmentally sound materials can be used and the building process itself is more sustainable and less damaging.
- Why do we need it? It is especially necessary in the social housing sector, which has not been a priority for recent governments. Only 57,000 new homes were built in 2019/20, which was 90,000 less than actually required. Current levels of home construction produce just 190,000 new properties every year, which is far short of the 300,000 a year necessary to avert the current crisis by 2030. Modular construction could help to bring these numbers up.
From the potential innovation of modular construction to the human input that the sector so desperately needs these are the key highlights in construction today.
