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Skills shortage threatens building boom

Rising activity in the SME construction sector threatens to be undermined by the prevailing skills shortage, the Federation of Master Builders (FMB) has warned.
According to its Q2 State of Trade survey, SME workloads continued to experience rising activity as more firms reported higher workloads in the three months to June 2015.

Firms indicating lower workloads fell to 15% from 20% in the previous quarter.

Businesses are forecasting rising activity levels over the next three months, albeit at a slower rate than compared to Q2.

The survey also projects output prices, wages and salaries and material costs are all set to increase over the next six months, in spite of the deterioration in the net balances for output prices and material costs.

The proportion of firms reporting that their workforce had decreased edged down to 18% from 19%, while the majority of businesses (57%) reported no change in employment, up from 55% in the previous quarter.

Commenting on the results, Brian Berry, chief executive of the FMB, said: “There can be no doubt that the building industry is booming but the skills shortage continues to loom large over our industry.

“Almost half of construction SMEs are struggling to recruit adequate numbers of bricklayers, with others finding it increasingly hard to hire carpenters and joiners, site managers and supervisors.

“Looking ahead, our members are reporting that their workloads are likely to rise over the coming three months which means the shortage of skilled workers will only become more acute. It also begs the question, how much stronger would the pace of growth in the UK construction industry be if we had an ample supply of skilled tradespeople?”

In the Summer Budget, Chancellor George Osborne announced the Government would be introducing a levy on large employers to fund three million high quality apprenticeships. However, the FMB believes the announcement has led to more questions than answers.

Berry said: “The Budget Statement said that “the levy will support all post-16 apprenticeships in England” and if this also includes the construction industry, the assumption is that the CITB levy will not continue.

“However, we are still unclear regarding the details surrounding this new alternative cross-industry levy. If the levy on large employers is only used to fund apprenticeship training by large employers, how will apprenticeship training by small firms be dealt with?

“Given that two-thirds of all construction apprentices are trained by micro firms, it’s vital that we have a system in place that drives high levels of apprenticeship training through companies of every size. We are keen to work closely with the Government over the coming weeks – the stakes couldn’t be higher so we must get this right.”

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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