Labour shortages hit construction industry as workload growth eases in region

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Labour shortages and declining workloads are hampering growth in the region’s construction industry, research has found.

Almost half (46 per cent) of firms in Yorkshire and Humber told the Royal Institute of Chartered Surveyors (RICS) that they had been hit by a lack of workers.

The survey also found workloads declined slightly in the first quarter of the year, with 34 per cent reporting increasing business compared to 42 per cent in the three months to December.

Despite this, optimism is high in the industry, with 75 per cent of construction businesses expecting more work in the next 12 months.

The findings echo this month’s Markit/CIPS Construction PMI survey, which put confidence in the sector at the highest level for nine years despite a slowdown in growth in March.

Housing remained a strong driver, with 46 per cent of private companies reporting rising orders in early 2015. Public housing was strongest in the North of England than in other regions.

Infrastructure saw the fastest growth since RICS began its survey in 1998, with 29 per cent of firms seeing an increase in activity in the quarter. This was up from 19 per cent in Q4 2014.

Private commercial and industrial firms saw a drop in workloads for the first quarter.

RICS director of the built environment Alan Muse said that alongside a range of unknowns - such as the General Election outcome and the UK’s future in Europe - access to finance is an increasing issue after nine months of decreased lending in 2014.

While the survey found material shortages had eased, a net balance of 55 per cent of businesses said they had been struggled with finding funds, something that will be felt most keenly by small and medium-sized businesses, he said.

He added: “Now that material shortages are becoming less of an issue, the practical challenges are in providing the skilled labour the industry needs and in alleviating the financial constraints.”