The ongoing drama that is Brexit and a third general election in five years has resulted in reduced levels of optimism according to the latest Q3 2019 RICS UK Construction and Infrastructure Market Survey.
It has to be said that the survey results are not unsurprising as the UK has faced continued political and economic uncertainty since the referendum vote took place over three years ago in June 2016. Only in October this year did the results of the Federation of Master Builders (FMB) State of Trade Survey for Q3 2019 also highlight that small building companies remain nervous about recruiting new staff and are in fact reducing the size of their workforce.
But it isn’t just Brexit blighting the UK construction economy as ongoing skills shortages resulting in stagnating staffing levels is also preventing growth. Concerns are now growing that if this trend continues it could lead to the capacity of the industry shrinking, which would be devastating when builders are needed more than ever, especially to help solve the housing crisis.
The fact that small builders are starting to slow on recruiting, with some reducing their workforce, means that there is potential to loss even more skilled workers if we stop employing them in the sector. Then of course there are all the other factors that the construction industry is currently having to contend with that all impact ever tightening profit margins.
Sky high material costs, which only look like they will continue to go up and ongoing wage inflation, driven by skill shortages means there is little wonder construction businesses are currently reviewing investment decisions. In response to the latest survey results Hew Edgar, RICS head of government affairs, said: “The UK’s construction sector has shown resilience in its contribution to the economy over a difficult decade. We are, however, at a national level seeing issues such as financial constraints, skills shortages, stagnant productivity, variable quality, output lagging behind target, and slim margins. Whilst not the panacea to resolve all these problems, off-site manufacture and modern methods of construction represent an opportunity to address many of these issues.”