Labour shortage ‘suffocating growth’
10th November 2015
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A slower, but still robust growth of demand for construction staff in October is highlighted by the latest Report on Jobs by KPMG and the REC but the report adds that growth is still being held back by labour shortages.
Adjusted for seasonal factors, the index for permanent workers in the construction sector fell from 64.7 in September to 62.8 in October. The latest reading was indicative of a sharp, although softer, expansion in permanent vacancies and one that was stronger than the UK-wide trend (62.1). Among the nine monitored sub-categories, construction was ranked fourth place in terms of demand for permanent workers in October.
Meanwhile, the equivalent index for temporary workers fell from 56.5 in September to a 21-month low of 55.5. Nonetheless, the latest figure was still consistent with a marked rate of expansion. The index for short-term staff in the construction sector remained below the UK economy average (59.7). Construction professionals posted eighth out of nine in the demand for staff rankings, ahead only of Executive/Professional.
Richard Threlfall, head of infrastructure, building and construction at KPMG said: “These latest figures point to a continuing shortage of labour, both permanent and temporary, in the construction sector. It is clear the industry is suffering from a chronic skills shortage along its entire supply chain, with recruiters struggling to meet demand for roles ranging from architects to construction workers. As a result salaries in the sector are soaring, with the average weekly rise reaching 5.1%, vastly outpacing the private sector average of 3%.
“The shortage of construction labour is suffocating the expected growth of the industry. We have seen weaker than expected output in the sector in the last few months, in particular in the commercial sector, and it seems clear this is largely due to projects being delayed and rescoped as a result of price rises caused by material and labour cost inflation.”
economics@markit.com
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