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Construction Skills Network report forecasts incomplete recovery

29 Jan 14 Even by 2018 the construction industry will still not be close to pre-recession levels of employment, a major new report predicts.

The Construction Industry Training Board’s latest Construction Skills Network (CSN) forecasts that the industry will need to recruit 182,000 new entrants over the next five years, but most of these will be just to replace those leaving.

Most sought after will be plant mechanics, followed by civil engineers and construction process managers, while and planned new nuclear builds will see the UK will experience the biggest increase in demand for scaffolders for four years.

The Construction Skills Network (CSN) is forecasting 2% growth this year, and 2.2% average growth for the next five years. This is a more optimistic outlook than this time last year, when CITB’s economists were predicting construction output to grow by less than 1% a year over the five years to 2017.

Over the 2014 to 2018 period, employment is projected to grow by an annual average of 1.2% to reach 2.588 million. But this is still 196,000 below the 2008 peak of 2.863 million. Even last year, 40,000 jobs were lost from the sector.

The CSN also gives regional and sub-sector breakdowns in its forecasts to 2018:

  • housing will account for 37% of the UK’s total annual construction output between now and 2018. 
  • Output growth will be strongest in the Southwest (+3.5%), Wales (+3.4%) and East Anglia (+3%) – which are all forecast  to perform above the national average of 2.2%;
  • The Northwest (+1.3%), the East Midlands (+1.1%) and the West Midlands (+0.8%) will be slower to feel the effects of the return to growth;
  • Employment growth will be a mixed bag across the UK, with East Anglia at the top end set to see its construction workforce increase by an average 2.0% a year, while the West Midlands is predicted to experience an average reduction of  0.2%;
  • Private housing will be the chief driver for construction’s growth and the sub-sector will see a 7.0% rise in output in 2014, followed by 5.0% in 2015. On average, it will grow by 4.6% a year to 2018.

In a warning tone, the report says: "A major spur to the economy seems to have been the effect on consumer confidence engendered by the Help-to-Buy scheme, which has kick-started the housing market quite substantially. However, there is concern that the recovery is being fuelled largely by consumer spending growth, despite a continuing decline in real household disposable incomes. Expansion in business investment, especially to the SME sector, is still muted. This indicates that consumers are driving spending by delving into savings and/or increasing their debt, which is not a sustainable trend for any period of time unless real disposable incomes start to increase again."

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CITB chairman James Wates said: “Clarity and certainty of future projects is an important element of a sustained recovery. That gives employers the confidence to train and to plan. The CSN report shows that the economy is turning the corner and the UK construction industry will benefit from that. But growth needs to be sustainable; underpinned by long-term infrastructure projects and continued investment.

“The government’s Help-to-Buy scheme has kick-started demand across the housing market and announcements on nuclear power, rail and roads have the potential to breathe fresh life into infrastructure and industry. Alongside this, we’d welcome fresh incentives to encourage house building, and the assurance that major infrastructure projects in the pipeline go ahead as planned.”

“Employment in 2018 is predicted to be 196,000 below pre-recession levels, which is why measures must be taken now to ensure growth is sustained over the long-term.”

According to the data, infrastructure is set to have the second largest impact on growth behind home building, with average annual growth of 3.6%, followed by industrial at 3.0% and public housing at 2.2%.

The knock-on effect is set to be a spike in demand for new workers which threaten skills shortages in some occupations.

For more information on the CSN and to read the full report, visit www.citb.co.uk/csn

Got a story? Email news@theconstructionindex.co.uk

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