A study by construction cost consultant Currie & Brown concluded that while headline inflation is easing, the skills shortage is predicted to drive an 8.3% increase in labour costs over 2023.
It warns that this could extend lead times by up to 50%, forcing contractors to re-scope projects.
“Fuel prices are returning to normal and issues around supply becoming less acute, but we are still contending with the longer-term, systemic issue of skilled labour shortages,” said Currie & Brown infrastructure director John Mansfield. “This is becoming more pressing and is a growing concern for our clients.”
The report also highlights that the combination of labour-driven and material cost increases could add £900m to the cost of the UK’s infrastructure pipeline in 2023 alone.
And things will only get worse as construction activity intensifies with new projects set to come online between 2025 and 2030, it says. The Construction Skills Network forecasts that the UK will need an extra 225,000 construction workers to meet demand by 2027.
While machines for digging and lifting have a history of reducing labour requirements on site, Currie & Brown reckons that artificial intelligence (AI) could also help alleviate labour shortages “through design, cost and risk management, safety and off-site construction innovations”.
Nick Gray, Currie & Brown’s chief operating officer for Europe, said: “The national infrastructure pipeline is crucial to both the economic health of the UK, and improving the entire population’s quality of living through increased access to key services. Therefore, the predicted skills shortage revealed in this report should be seen as a wake-up call for the construction industry. Avoiding a cliff-edge that threatens the delivery of key projects such as the Transpennine Route upgrade programme, works at the Port of Liverpool, and the national hospitals programme will demand a collaborative effort on training from players across the industry. It will also need robust project management and continuous, close control of cost and risk.”
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