ConstructionSkills, which releases its five-year projections each year, wants the government to take action in the 2011 budget to support skills development and help create stability for the sector through investment in core infrastructure.
For its part, the industry training body has outlined how it will support construction companies with a five-point skills plan to promote growth.
The Construction Skills Network (CSN) report shows that, despite the industry performing better than expected in 2010, the sector is likely to contract by 1% during 2011. This could have a detrimental impact on an industry which is already struggling to deal with the effects of a prolonged downturn.
ConstructionSkills’ five-point plan for growth takes in productivity, carbon reduction, increased engagement with employees, recruitment, and education and training as a means of working to help protect and grow the sector’s skills base.
The five-point plan is:
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Prepare for growth through increased productivity: Long term growth for the sector during a period when public spending is tight will require the industry to improve productivity so that it can stay profitable at a time when inflation is rising and margins are being squeezed. This will require a focus on maintaining existing skills and developing new ones, as well as innovation in working practices, to prepare the sector for growth.
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Lead the low carbon revolution in construction and the built environment: Ensuring SMEs within construction and the built environment sector are prepared to take on the energy efficiency challenge. In a sector that accounts for 47% of all UK carbon emissions, the move to cut CO2presents a logistical challenge but also a great opportunity for growth.
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Engage with employers to meet the demand for skills: Working with the industry at a national and local level to guarantee the industry recruits the 43,000 new workers a year it needs until 2015. Understanding the diverse skill requirements across the UK so that the construction and built environment sector can drive innovation and growth in communities across the country.
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Tackle the recruitment challenge: Ensuring a pipeline of talented new entrants coming into the industry by championing apprenticeships as the best vocational route available, keeping this option front of mind for employers, students and the public sector. Looking for innovative, employer-led approaches to stimulate more graduate new entrants.
- Develop education and training provision for all: Funding and training provision for new entrants must remain but not be to the detriment of developing the industry’s biggest asset, the existing workforce. To maintain the competitiveness of the construction sector we need to invest in ‘up-skilling’ and protect funding and training provision for adult skills.
CITB-ConstructionSkills deputy chairman Judy Lowe said: “The next couple of years will be really tough for the industry. But as the CSN forecasts show, there are signs of longer-term confidence returning to the market. Major infrastructure investment has been announced, particularly in rail and water, and work is starting on the Cheese Grater, the Walkie-Talkie and Darth Vader’s Helmet – exotic names, but proof investment is being made.
“As the sector skills council for the industry, we have a real role to play in supporting construction through these difficult times. Our objective is to help the industry maintain existing abilities, develop low carbon skills and meet the demand for new talent. Government support will help to ensure that we all have the right foundations in place, ahead of the recovery.
“Businesses need to retain their competitive edge, maybe looking at the Green Deal and the estimated 26 million homes in need of refurbishment. Above all, they need to take advantage of the wide-range of financial and practical support available from CITB-ConstructionSkills.”
While the forecast of a slowdown in 2011 is bad news, the report outlines that the initial decline will be followed by a period of stabilisation and sustained recovery. CSN data suggests that output will grow steadily between 2013 and 2015, expanding by an average of 1% across the whole forecast period.
This means that by the end of the five-year cycle, output is predicted to be 6.2% above forecasted levels for 2011. It will also mean that a total of more than 200,000 new workers will be needed to complete planned projects, with an average annual recruitment requirement of 43,000.
Buoyed by government spending
The CSN forecast shows that, over the past 12 months, the construction industry has been buoyed by Government spending on housing and infrastructure and grew by between 4% and 5%. But because of reduced work values – with firms completing projects for lower prices than in previous years – the figures show that there was little change to the industry’s output in 2010 when compared to 2009.
Businesses may continue to feel this type of pressure over the next few years, as increased competition for fewer contracts is likely to drive down margins even further. Against this backdrop, the prospects for different UK regions and sub-sectors of the industry vary noticeably between 2011 and 2015.
North/south divide
Figures show that regions such as the east of England, the southeast and Greater London will experience higher than the national average annual growth (at rates of 2.4%, 2.2% and 1.8% respectively). Meanwhile, industries in the northwest, the northeast and Yorkshire & Humberside will all shrink between 0.4% and 0.6%.
Private sector housing and the industrial and commercial sectors will be the main drivers for the industry over the five-year period, each contributing more than 4% average annual growth. In contrast, following strong growth in public sector housing and public sector non housing in 2010, both of these areas will decline sharply between 2011 and 2015, posting average annual contractions of 5.6% and 12.4% respectively.
Growth in infrastructure and low carbon
As in previous years, infrastructure projects will also play a key role in keeping the industry afloat, with the continuation of developments such as Crossrail in London, the M74 in Scotland and the Manchester Metrolink.
Additionally, an area of growing importance for the sector in the latter part of the 2011-2015 cycle is likely to be the increasing number of ‘green’ contracts. These include new renewable energy plants and retrofitting buildings with energy-efficient fabric and technology.
ConstructionSkills research manager Lee Bryer said: “The Construction Skills Network has been in operation since 2005, and is the most robust of all industry forecasts for identifying the future employment requirements of the sector.
“In times of economic hardship, the significance of our report is even greater. Precise planning is essential to ensure that we have the right skills in the right place, at the right time, ahead of the upturn. ConstructionSkills will therefore use the CSN data to develop and deliver a wide range of products and services for employers, and ensure that these goals are reached.”
The Construction Skills Network is co-ordinated by ConstructionSkills in conjunction with Experian, which provides information and analytical services. The CSN has more than 700 members, including representatives from government, trade associations and employers, who attend meetings and contribute their skills and knowledge.
The full Construction Skills Network 2011-15 report can be downloaded at www.cskills.org/csn
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