Why the construction industry is seeking Government aid - Martese Carton

The main reasons for these rapid price increases include the war in Ukraine which has limited the supply of raw materials such as timber, as well as the huge increase in the cost of the energy needed to produce materials such as bricks and plasterboard. And with Andrew

Bailey, the governor of the Bank of England last month asking companies to show restraint in passing rising costs on to customers, the UK construction industry is facing real pressures.

The Government’s Construction Material Price Index which shows the cost of raw materials, has increased by almost a fifth over the past year - the largest annual increase since the index was created in 2015. As an example of the supply pressures the industry is facing, at

the end of 2022, the stock level of the typical ‘common’ brick used in the UK construction industry stood at 19 million – over 50 per cent lower than the 39 million bricks which were available pre-pandemic.

Although construction output in the UK jumped by 2.4 per cent in February giving the sector a welcome £15bn boost - the increase was due to an increase in private housing repair and maintenance rather than an increase in the level of new homes being built.

The ONS figures report a mixed picture across work sectors — for example, new commercial housing projects saw a 4.4 per cent fall, continuing the trend of not enough housing being built. And looking further ahead, the outlook for housebuilding is less optimistic, given

that March was the wettest for 40 years which will mean that site work will have been impacted.

There has also been an impact on the level of apprenticeships in the construction industry. According to the Construction Industry Training Board (CITB), the number of new apprenticeship starts in the construction industry, has declined dramatically over the past decade.

In 2011/12, there were 28,850 apprenticeship starts in the construction industry, compared to just over 18,800 in 2018/19, a decline of 35 per cent. Despite the recent announcement by the government that bricklayers, roofers, carpenters, and plasterers will be added to the

Shortage Occupation List from this summer meaning the skills gap will be partially plugged, industry commentators say that the list doesn’t go far enough and should include, for example, additional professions such as electricians.

The industry has been very active in trying to address these issues. Trade bodies such as the Federation of Master Builders (FMB) and the CITB are calling on the government to provide support for the industry. The FMB has called for the government to provide incentives for small and medium-sized construction firms to invest in training and development, while the CITB is calling for increased funding for apprenticeships and training programmes.

Martese Carton, Director of Mortgage Distribution at Leeds Building Society.