Two years after the EU referendum the sector is facing a skills shortage watershed
The London construction market is facing a 鈥楤rexodus鈥� of talent, according to a new report from consultant Turner & Townsend.
T&T鈥檚 second quarter market intelligence report said the industry was 鈥渃aught in a double bind 鈥� weak demand as clients defer investment decisions, and a long-term skills shortage which is driving up labour costs and slicing into contractor margins.
鈥淭wo years on from the Brexit referendum, the skills shortage is at a turning point. An exodus of foreign-born workers and a demographic time bomb threaten to shift the skills crisis from serious to chronic.鈥�
At the time of the EU referendum two years ago nearly half (49.6%) of the capital鈥檚 construction workforce had been born abroad, T&T said, a figure which has since plunged by seven percentage points 鈥� the fastest 18-month decline seen in 15 years.
UK regions were relatively less exposed, T&T said, but still faced a separate skills challenge from an ageing workforce. While the North East of England only has a migrant workforce of 6%, 53% of workers were aged 45 or over.
Paul Connolly, T&T鈥檚 managing director of cost management said mounting a successful recruitment fightback had never been so important, 鈥渂ut to do this the sector needs full-throated support from employers beyond existing contributions through initiatives such as the apprenticeship levy鈥�.
Connolly warned it would take time to tackle what he called a 鈥渄emographic timebomb鈥�.
He said that at a project level the industry needed to arm itself with strategies to mitigate wage inflation and drive maximum productivity from a diminishing labour pool.
鈥淥nly by increasing productivity, protecting margins and attracting new talent will the construction industry be able to deliver the game-changing infrastructure projects and housing the UK needs,鈥� he added.
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