The Merry Month by Robert Merry
Robert Merry is an independent stone consultant and project manager who ran his own company for 17 years. He also acts as an expert witness. Here he contemplates the past month in the stone industry.
According to the 2011 census of UK Construction, at the age of 55+ (a gentleman never discusses his age) I am part of the 30% of the workforce who will be considering retirement in the next few years. The next age bracket, 45-51 years old, representing 38%, won’t be far behind.
Of a total construction workforce of 2.1million, 68% – 1.4million of us – will probably have left the industry within the next 10-to-15 years.
But is the aging workforce being replaced anytime soon?
According to figures from the Construction Industry Training Board (CITB) there were 14,900 first year construction apprentices in 2015.
The Farmer Review of the UK Construction Labour Model, commissioned by the government’s Construction Leadership Council, predicts upward of 60,000 will be leaving the industry annually.
This represents a huge shortfall accumulating year on year.
The reasons for the increase in the construction market can be traced to two influencing factors. Firstly the government’s housebuilding programme, which aims to add 110,000 homes a year, equating to an additional 371,000 workers, according to a report by Arcadis, a Dutch consulting engineer.
Perhaps the numbers seem far-fetched?
Secondly, the current government infrastructure pipeline of £500billion, including HS2, Hinkley Point C nuclear power station and Thames Tideway tunnel, among others, will require 100,000 additional construction workers by 2020, according to the government’s own figures. That’s just two years and six months away!
If 'hard Brexit' (whatever that really means) leads to an exodus of migrant workers (and thousands have already left), that will also impact the construction labour market. It will leave a lot of gaps to be filled.
According to the National Institute of Economic & Social Research, 12% of the construction workforce are migrants, half from the EU. That’s 126,000 jobs filled by EU workers in construction. Spread over the country, the loss of those workers (or some of them) is a problem but not a disaster.
Until, that is you look at London, where 95,000 of the EU migrants are in construction, according to the Mayor of London’s office. That’s more than a quarter of the 350,000 construction workers in the capital.
What is the construction industry doing about this shortage?
In spite of high demand, profit margins can be as low as 1%. A labour shortage would be expected to increase employment costs, providing an incentive for companies to take on trainees and apprentices. But with such low margins, companies are unwilling or unable to respond by encouraging people into the industry.
So is this the future of the UK construction industry? We already have an adversarial
sub-contract culture with no job security; we can't produce the output needed; and not many of us make a profit.
Rod Sweet and David Smith suggest an outcome in a paper entitled Will China Build Tomorrow's Britain? (CRI Volume 8, 2017). The title speaks for itself.
The Farmer Review called for the UK industry to 'modernise or die'. I hope it’s not too late.