Five years ago the Construction Products Association (CPA) highlighted a demographic crisis facing the UK construction industry. Today it says that things have only got worse.
Over the past five years, UK construction has lost an average of 70,000 workers a year. At the same time, apprenticeship starts have averaged 31,000 per year in the last five years, with a dropout rate of 40%. That means every year has seen a net loss of 50,000 people from the labour pool.
The CPA autumn forecasts, published today, describes the skills shortages and the number of construction workers that have left the industry as “the greatest issue facing UK construction in the medium-term”.
It explains: “UK construction employment in 2019 Q1 already had a major age demographic problem in the UK-born workforce, with a spike in employment in the 50-64 age range. This meant that UK construction was set to lose over 500,000 workers, over one quarter of the workforce, within 10-15 years.
“However, the age-demographic problem and loss of construction employment have accelerated between 2019 Q1 and 2024 Q1. There were 2.08 million people employed in UK construction in 2024 Q1, which is 1.9% lower than in 2023 Q4 and a year ago, plus 14.3% lower (347,000 fewer workers) than at the recent peak in 2019 Q1 in part due to the double-digit falls in activity in the two largest construction sectors, private house building and private housing RMI (repair, maintenance and improvement). The employment fall also includes the impact of government delays, pauses, and cancellations of new infrastructure projects as previous projects are completed.
“The largest loss in construction employment since the recent peak in 2019 Q1 has been in self-employment, primarily older age-demographic workers in specialist trades, which is why it has not got as much media coverage as if it was mainly job losses at major house builders and tier one contractors. Self-employment in construction in 2024 Q1 was 1.5% lower than in 2023 Q4 and 21.9% lower (217,200 fewer self-employed UK construction workers) than in 2019 Q1.
“The number of employees in UK construction in 2024 Q1 was 1.3% lower than in 2023 Q4 and 8.6% lower than in 2019 Q1, a loss of 122,250 construction employees. What this means is that, overall, UK construction has lost almost 350,000 workers between 2019 Q1 and 2024 Q1, while apprenticeship starts averaged 31,000 per year in the last five years, according to CITB, and the dropout rate is over 40%.
“How the industry deals with these skills shortages will be the biggest issue to construction growth medium-term and, for the new government, will be crucial in determining whether it can meet its objectives of building 1.5 million homes, delivering the £700-775 bn infrastructure pipeline and net zero transition.
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