The latest quarterly market report from quantity surveying firm Gleeds identifies widespread fears that the availability of materials and labour will worsen over the coming quarter.
Gleeds said that 77% of the respondents to its poll said that they expect price hikes and restrictions on products like steel frame, facades, and M&E packages to continue into the autumn, with potentially dire consequences.
84% of responses from contractors, consultants, and architects reported delays to projects as a result of materials issues, while 44% said they were experiencing recruitment problems – up from just 17.5% three months ago.
Gleeds said that its findings echo recently released data from the Office for National Statistics that showed the skills shortage has intensified across the UK. For the March-May 2021 period, the ONS recorded the highest number of vacancies in the construction sector for 20 years, with 35,000 vacant roles waiting to be filled. With a dearth of skilled labour, 63% of contractors told Gleeds that they had experienced subsequent increases to worker’s rates in their region, compared to 44% in the preceding quarter.
Gleeds chief executive Graham Harle said, “While our report makes plain the concerns of construction professionals around continued disruption to the supply of materials, it also highlights very real issues linked to a shrinking labour force.”
He added: “With huge public sector projects taking precedence, swallowing up as many people as they can in order to keep building, small and medium sized contractors are inevitably going to lose out. The knock-on effects will be far-reaching, extending to our ability to meet our carbon zero ambitions as prices rise and the essential retrofitting and repurposing of existing building stock takes a back seat.”
Gleeds has also updated its inflation forecasts, with most regions given a higher inflation forecast than previously for the year ahead. See table below.
Gleeds’ summer 2021 market report, Feeling the Burn, is available here.