Credit crunch hits forecast construction job opportunities

The UK’s current economic downturn has seen the annual requirement for new construction staff halve, according to new figures. However, despite fears in some sectors of the market, the industry will continue to grow over the next few years according to the forecast from the Construction Skills Network (CSN).

The CSN, which reports on the numbers of new industry recruits needed to satisfy growth, shows that a slowdown in the housing market and related sectors has reduced the requirement from the previous average of 88,000 per year to 42,000 per year between 2009-2013. From the previous forecasts produced at the end of 2007, this is a total fall of 184,000 new recruits needed by the industry over 4 years.

The figures, which are usually published every February, were re-calculated to provide an interim indication of the impact the credit crunch is having on the construction sector’s skills needs, based on changes to official data and feedback from the Network’s experts around the country.

However, the forecast also reveals that, despite fears in some sectors of the market, the industry will continue to grow over the next few years. Between 2009 and 2013, UK construction is expected to expand by 0.7% annually, thanks to high-value projects like the Olympic Park and the Thames Gateway re-development, and continued public sector investment in services and facilities such as roads, schools and hospitals.

The new forecasts indicate significant sub-sectoral differences, for example infrastructure is still showing very strong annual average growth at 6.5% to 2013. This is in contrast to the 0.3% growth for private housing. These differences have contributed to the stark change in requirement for new recruits, with infrastructure being far less labour intensive, so requiring fewer new entrants to deliver planned projects.

Sandra Lilley, Manager of the Construction Skills Network, said: “The current economic climate provides challenges to every business sector, and construction is no different.

“But, despite some high-profile redundancies recently, our growth predictions remain strong and in line with industry and Government forecasts. The fact is that we still need over 40,000 new entrants to the industry every year to fulfil some big projects, and that’s a significant requirement.”

Longer-term predictions denote strong growth for UK construction. The “2020 Vision” report resulted from a recent research project conducted by ConstructionSkills, the industry’s Sector Skills Council which co-ordinates the Construction Skills Network. The report demonstrates that despite the possibility of a prolonged economic downturn, construction activity is set to increase in the long term. By 2020, the industry could be worth a £109.2bn in 2000 prices, which is a 31% increase in real terms over the 2007 level[1]. It also highlights future skills trends, including the continuing demand for specialist workers over the next decade to accommodate changing construction methods and practices.

Mark Farrar, Chief Executiveof ConstructionSkills, added: “The indications are clear that the construction industry will continue to flourish in the long-term, and that the workforce will expand beyond the current number of 2.5 million.

“We advise firms to continue training their employees, as this will ensure they have a safe, professional and qualified workforce, putting them in a stronger, more competitive position to win and retain contracts. Businesses should protect and seek to improve the quality of their workforce to mark themselves out to potential clients. Past experience also shows that some of the experienced workers leaving the industry tend not to come back, and should this happen it may cause major problems for the country to deliver much-needed affordable housing, schools, hospitals and roads.”

To help preserve the industry’s young apprentices in the economic downturn, ConstructionSkills has worked with the Department of Innovation, Universities and Skills (DIUS) to offer practical solutions to the industry. A Construction Task Force has been established to offer support to businesses in maintaining their training levels for apprentices, while a ‘Clearing House’ system has also been set up to find new placements for those facing redundancy.

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For further information or to arrange interviews, please contact Sam Holl or Imogen Petit at Geronimo Communications on 020 7299 8740, or email imogen.petit@geronimocommunications.com  

Notes to Editors

About the Construction Skills Network

The Construction Skills Network, coordinated by ConstructionSkills, is a partnership between the Sector Skills Council, the Government, construction companies, education and training providers, regional agencies and customers. It was established to provide a single, clear understanding of the industry's current skills position.

About the interim forecasts

The CSN runs on a 12-month cycle, with annual forecasts fixed at the end of the year then published in February for the following 5-year period. Updates are not usually published in between the annual forecasts however the rapid and extensive change in economic circumstances since we fixed the model at the end of 2007 means there is an immediate need to understand the likely impact on industry skills needs. The national model has therefore been re-run, taking into account macro-economic data.

About ConstructionSkills

ConstructionSkills is the Sector Skills Council (SSC) for the construction industry. It is a partnership between CITB-ConstructionSkills, CIC and CITB Northern Ireland. It is UK-wide and represents the whole industry from professional consultancies to major contractors and SMEs.

Established as an SSC in 2003, ConstructionSkills is working to deliver a safe, professional and fully qualified construction workforce. All three partners are committed to working together to deliver industry-led skills and training solutions through the Sector Skills Agreement for construction. We work to negotiate the best partnership and funding deals for the construction industry to help raise standards and we develop the skills products and services employers need.

The construction sector is central to the UK economy, generating almost 9% of UK GDP and with a turnover of more than £203bn a year.

[1] The Base Case in the 2020 Vision report, which was an extrapolation of recent trends (prior to the effects of the credit crunch), gives output of the industry at £109.2bn in 2000 prices, which is a 31% increase in real terms over the 2007 level. Output in the four scenarios ranges from a low of £92.6bn (11% growth) to £121.9bn (46% growth).