RedRock Construction Industry Outlook – July 2018

This month sees a welcome improvement in outlook for the UK construction industry.

Good weather and the football feel-good factor have accompanied a modest recent improvement across the UK economy as a whole

It isn’t just the football that has made us all feel more positive recently. According to the most recent Office of National Statistics (ONS) analysis (issued on 10th July 2018) there was a small growth of 0.3% in the UK economy during May, thanks in part to a combination of the warm weather and the royal wedding.

No doubt the success of the England team in the Football World Cup also encouraged a feeling of optimism for many of us over the last month or so with the nation’s retailers benefiting from sales of beer and barbecue ingredients! Although the figure only reflects a small improvement, the picture does look better than during the terrible weather at the beginning of the year. So, does this positivity also apply to the construction industry?

leisure, food, people and holidays concept - man cooking meat on barbecue grill for his friends at summer outdoor party

How did the construction industry fare in June?

The ONS report pointed to a growth of 2.9% in the construction industry in their report following no growth in April and a contraction earlier in the year. There was also slightly better news for the industry coming from the  HS Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) data for June. The survey saw increasing improvement during the month with the Index increasing to 53.1 from May’s level of 52.5. As a general rule a figure above 50 indicates growth in the industry and below means contraction. This was also slightly above analysts’ expectations – which had been 52.5.

A contraction near the start of the year had been blamed on the extremely poor weather during the winter months and this increase may well indicate that this earlier analysis was correct.

Why are things looking up?

According the the index, house building was the strongest sector in the construction industry during the month of June. The monthly Halifax survey (reported in the Guardian)  which looked at the housing market in the same period revealed that prices had risen a very small amount for two months in a row. This was a very modest rise and house prices are still essentially flat – but any evidence of a consistent upturn is likely to prove positive for the house building sector in coming months.

Building Site With House Under Construction

However, the Index did also see a general expansion in all construction areas with signs that commercial building is beginning to increase again after flatter activity in early 2018. New orders are up leading to an increased workload across the sector.

There was a downside which was an increase in input costs throughout the industry.

What does this mean for employment in the construction sector?

Two factors from this month’s finding are particularly notable – new orders were at their highest level since mid 2017 and job creation was at its highest level since a year ago. Both of these factors also led to an increase in the purchase of raw materials across the industry.

Our verdict: A general improvement across the industry highlights the growing need for skilled professionals in all sectors

Although the survey indicates an improvement in sentiment – it is still early days to herald a complete rebound. Some uncertainty remains – with residential housing construction in the lead, commercial projects improving and civil engineering still needing to catch up.

We are, however, delighted to see an improvement in the job creation figures as this indicates a boost for the jobs market as a whole.

Are you looking for the next step in your construction career? Or are you looking to recruit quality construction professionals? Get in touch with RedRock today and we will be delighted to discuss your requirements.

RedRock Construction Industry Outlook – June 2018

The RedRock Construction Industry Outlook reviews sentiment in the UK construction industry every month, with a particular focus on the labour market.

There was little change for UK construction industry growth in May:

The Chartered Institute of Purchasing and Supply (CIPS) Construction Purchasing Managers Index (PMI) is eagerly awaited by the construction industry every month because it provides a good indication of sentiment in the sector. The index is compiled from feedback and surveys from some of the industry’s major players, and respondents are asked to rate general conditions in the sector for production, employment, prices, deliveries, inventories and new orders over the previous month.

The headline reading for the PMI for the month of May was 52.5 – exactly the same as it was in April. A reading above 50 indicates expansion of the sector and below 50 shows a contraction. Although appearing to hold steady, the figure was actually slightly better than had been anticipated by industry analysts who had forecast 52.0.

Key takeaways from this month’s data:

Industry analysts have highlighted a number of areas from the May PMI as being particularly noteworthy:

Some firms indicated that good weather conditions during May led to improved construction activity, allowing for a catch-up following very poor weather at the beginning of the year. However, this could reflect a one-off rebound from the negative growth caused by the ‘Beast from the East’ in the first quarter, meaning that the same positivity might not be sustained as we progress further into 2018. The Guardian online also cited retail store closures as having a negative affect with some retailers choosing to avoid expansion and putting off the construction of new stores.

Residential house building remained the healthiest sub sector, but commercial and civil engineering were less robust. These areas have the potential to be more directly affected by general economic and political concern – particularly around Brexit. This atmosphere of uncertainty was further reflected in the fact that new orders declined in May for the fourth time in 5 months. The situation was further exacerbated by an increase in some important business costs which have a particular impact on the construction industry including steel and plastic, as well as rising fuel costs.

Job creation also experienced a four month low during the May survey period. BUT respondents reported that they are still facing a shortage of skilled construction professionals.

What does this mean for the industry as a whole?

The latest PMI data has produced a lukewarm and slightly mixed response from economic and business commentators. The CIPS described it as ‘subdued’ in its commentary, whereas investing.com saw the industry as ‘holding steady’. However, there can be no doubt that a climate of general political uncertainty has affected confidence which inevitably has a knock-on effect on willingness to plan and undertake major construction projects. This is despite the fact that there is undoubtedly a requirement and appetite for major infrastructure improvements throughout the UK.

 Our verdict: Skilled workers remain in demand

Watch this space. A mixed picture this month means it is difficult to predict or define a pattern at the moment. One thing that is true is that firms continue to have a high demand for skilled workers and that reflects our experience here at RedRock where we make it our priority to place the most skilled workers with the best opportunities provided by our clients.

Find out more about how we support our clients’ construction industry requirements or get in touch.

 

‘Brickie Visa’ proposed to plug construction skills shortage after Brexit

As Brexit negotiations loom, fears over the ongoing shortage of skilled workers in the construction industry have led to call for a what the media has dubbed a ‘Brickie Visa’ which would allow EU builders and other skilled trades people to continue to work in the UK on a short term basis following our exit from the EU.

The visa has been proposed by Migration Watch – a UK based think tank. Migration Watch believes that the existing construction skills shortage faced by the UK will only be made worse by exit from the EU, and that more time is required to train up skilled workers.

The roles that would be affected are lower-skilled than would currently qualify for visas for workers entering the country from outside of the EU, and would include bricklaying, plumbing and construction. The proposal is that the visas would be temporary and in place for no more than three years following Brexit. Employers would be charged a levy for workers employed in this way and would need to demonstrate that they were unable to find the right skills within the UK.

Builder On Building Site Discussing Work With Apprentice

The Credit Protection Association reports that the general response from employers has been ‘sceptical’, with many believing that three years is not enough to time to address the construction skills shortage that the country is facing.

In a blog on Scottish Constructions News, Kelly Boorman (Head of Construction at RSM) echoes this feeling. She points to the other problems that already exist in the construction industry which have simply been exacerbated by the Brexit situation, including an ageing workforce and intense pressure for new housing stock throughout the country.

What does this mean for construction firms in the UK?

Planning your workforce continues to be important and this requirement will only become more pressing when the UK leaves the EU. Whether a ‘Brickie Visa’ is put in place or not, there will continue to be competition for skilled workers in this industry. Working with an expert construction recruitment agency always makes sense, but even more so when we are facing the uncertainty of Brexit.

The Red Rock team are a specialist construction recruitment agency  which has more than 20 years experience in the construction industry, giving them unique insight into the needs of their clients throughout London and the South East. They provide a no fuss service which identifies exactly the right skilled workers  when and where you need them. Give us a call on 01992 807911 to discuss your requirements. 

 

Recruitment Still a Major Challenge for Construction Industry

Construction recruitment for surveyorsThe latest report from the Royal Institute of Chartered Surveyors (RICS) has found that recruitment continues to be one of the biggest challenges facing the construction industry. The RICS report is based on a survey of the construction industry in the first quarter of 2017. It found that there was a net increase of 27% in the number of people reporting that they had more work.

This shows that the construction industry is still doing well with plenty of new orders coming in. Like the recent report from the CITB that we covered one of the biggest growth areas is predicted infrastructure projects, but private housing and private commercial developments have also seen an increase. Of all the areas surveyed the construction industry in London and the South East reported the highest levels of growth.

 

Blockers to construction industry growth

The RICS report found there were a number of factors holding back the construction industry. 70% of respondents reported that access to finance was an issue, while 61% of respondents cited planning and regulation as issues.  Rounding out the top 3 issues for the construction industry was recruiting construction workers.

It is the usual construction trades and professions where recruitment is a particular problem such as recruiting bricklayers and surveyors. Interestingly though the RICS survey found that it is quality rather than quantity which is posing the biggest problem for construction recruiters.

 

Recruiting Quality Construction Workers

As well as providing statistics which show the overall opinion on the state of the construction industry the RICS it also gives us some of their raw responses. When asked about challenges with construction recruitment in London and the South East some of the responses were:

“The pending immigration controls due to Brexit will impact skills shortages”.

“Our main constraint is finding good quality candidates at sustainable salaries”

“Lack of essential trade skills”.

“Recruitment of quality Building Surveyors at reasonable cost continues to be problematic”

There were many other responses from around the country that followed a similar theme. The common problem is not simply recruiting anyone, it is getting the right people at rates that make sense in the long-term. For a short-term bricklaying contract it is possible to throw lots of money at the problem to get staff. For longer-term recruitment such as for surveyors this is not really sustainable. As lots of the respondents pointed out the only real way to solve ongoing construction recruitment issues is to train more people and to train them better.

 

RedRock Recruitment are a specialist construction recruitment agency working in London and the South East. We recruit across the construction industry from labourers and bricklayers up to surveyors and project managers. If you are struggling to recruit the people you need at sustainable prices we can help. Just give us a call on 01992 807911

Over 2.6 million now working in construction

A new report from the Construction Industry Training Board (CITB) has found that the number of people working in construction in the UK is now over 2.6 million. The last time the number were this high was in 2009 before the full effect of the credit crunch had hit. The number of construction workers is predicted to continue rising over the next 5 years, albeit at the relatively low rate of 0.6%.

There are current shortages in the construction industry around carpenters and bricklayers. While these shortages are not predicted to disappear many of the roles that will need to be filled in the next 5 years will be technical or management.  The table below shows the number of people working in various parts of the construction industry now and in the numbers predicted to be there in 2021.

Job 2017 2021 Difference
Senior, executive, and business process managers 172,930 177,710 4,780
Construction project managers 47,800 52,110 4,310
Non-construction professional, technical, IT and other office-based staff 356,430 373,120 16,690
Construction trades supervisors 49,010 52,980 3,970
Wood trades and interior fit-out 264,720 262,920 -1,800
Bricklayers 72,700 72,760 60
Building envelope specialists 107,010 105,000 -2,010
Painters and decorators 112,180 111,080 -1,100
Plasterers 49,320 47,500 -1,820
Roofers 44,230 43,830 -400
Floorers 26,630 25,580 -1,050
Glaziers 30,620 29,680 -940
Scaffolders 23,600 24,390 790
Plant operatives 39,580 42,040 2,460
Plant mechanics/fitters 40,960 39,310 -1,650
Steel erectors/structural fabrication 25,700 25,450 -250
Labourers nec* 124,750 127,220 2,470
Electrical trades and installation 183,470 175,440 -8,030
Plumbing and HVAC Trades 166,600 161,100 -5,500
Logistics 22,070 23,260 1,190
Civil engineers 53,630 57,610 3,980
Architects 43,480 47,800 4,320
Surveyors 72,040 76,250 4,210

As you can see the areas with the biggest predicted increases are professional and office based staff including project managers, architects and surveyors. The biggest decreases are predicted to be in some of the more traditional trades such as electrical and plumbing work.

 

Infrastructure Growth

Part of the explanation for why more technical and professional construction roles will see the larger increases is down to the type of work expected to see most growth. The CITB report claims that government infrastructure projects will be responsible for 45% of all growth in the construction industry between 2017 and 2021. The Hinkley Point nuclear power station on its worn is estimated to account for 0.8% of construction output in 2021. With other new nuclear power stations and HS2 due to start in the next couple of years there is going to be a need for a large number of planning and support workers while less skilled labour is generally needed for this type of project.

The CITB projections do depend heavily on the government continuing with it’s current infrastructure spending plans and with Brexit not having a huge impact on construction. However, they are a useful guide for those involved in construction recruitment and skills training. For the professional and technical roles that the CITB are predicting will see the biggest growth it can easily take 4 or 5 years to train new people. Having a rough ideas of the likely construction recruitment needs in 2021 at least lets us start planning.

 

RedRock Recruitment are a specialist construction recruitment company serving London and the South of England. We do recruitment accross the construction industry, including for professional and technical roles. To find out more about our construction recruitment service give us a call on  01992 807911

Fears over skills shortages as construction industry grows

The latest figures from the Office for National Statistics (ONS) show that the construction industry is continuing to grow. Although the monthly output rate for the construction industry can be pretty volatile the overall trend is one of steady growth.

growth in construction work overview graph

Most of the growth in the construction industry is coming from new contracts, with repair and maintenance work remaining fairly static.

Growth in different types of Construction work graph

A separate survey of construction subcontractors has found that subcontractors an average have 22 weeks’ worth work already in the pipeline, showing that there is plenty of work around. Most of this work is coming from commercial construction projects, with homebuilding being a close second.

 

Skills Shortages a Major Challenge

Although subcontractors generally reported having plenty of work on the books they also reported having problems recruiting skilled construction workers. 21% of subcontractors surveyed said that the construction skills shortage was a ‘future threat to their businesses’. The only factor seen as a bigger threat was late payment.

There has been a lot of press about the construction skills shortage recently. A number of trade reports have been released showing too few new workers being trained and there are fears that a lot of European workers may go home as a result of Brexit. According to figures from the Greater London Authority there are almost 95,000 European construction workers in London alone. If significant numbers of them leave as a result of Brexit then it could have a major impact on the ability of subcontractors and main contractors to complete construction projects.

For those subcontractors who are struggling to recruit skilled construction workers it is more important than ever use a specialist construction recruitment company like RedRock. Our recruiters know the skills that needed for different trades and how to assess that workers have the correct qualifications and experience. We also always speak to a workers references to check what their work was like. That way we can be sure that any construction workers we put forward for a job have the correct skills to get it done.

To find our more about our construction recruitment services give us a call on 01992 807911

How will Brexit hit construction recruitment in London?

There were reports this week that Brexit is already having a big impact on recruitment to the NHS. There has been a drop of 92% in the number of EU nurses applying to work in the NHS since the referendum. At the same time there has been a 68% increase in the number of EU nurses leaving the NHS. It will be a while before we are able to get similar figures for the construction industry but the impact could be just as dramatic. Around 5% of nurses in the NHS are from EU countries. In the construction industry the percentage of workers from the EU is higher, around 8% nationally.

As the table below shows very large numbers of construction workers in London are from the EU. Just the Polish and Romanian construction workers add up to almost 60,000.

Country Construction workers in London
Austria 279
Bulgaria 6,625
Croatia 291
Cyprus 509
Czech Republic 214
France 2,507
Germany 1,766
Greece 987
Hungary 685
Italy 730
Latvia 1,509
Lithuania 10,955
Poland 27,178
Portugal 1,220
Republic of Ireland 7,485
Romania 29,475
Slovakia 306
Spain 2,111

(Figures taken from Greater London Authority Labour Force Survey)

If the number of EU construction workers leaving was anywhere close to the levels seen in the NHS it could cause major issues for the construction industry in London. There are already shortages of skilled workers in a number of trades such as bricklaying and carpentry and large parts of the construction trade in London are propped up by EU workers.

Construction makes up around 3% of the workforce in London. However, the construction workers employed in London make up 11% of all UK construction workers. This means that London already pulls in a lot of construction workers from across the UK as well as from further afield. With the length of time it takes to properly train new construction workers it could be several years before a meaningful number of new construction workers can trained up.

 

Fixing the construction recruitment gap

If there are going to be less skilled construction workers available in London then finding the right workers for projects is going to be harder than ever. This is where a specialist construction recruitment company like RedRock Recruitment really comes into its own. We have access to many construction workers who are not on the general market and keep in close touch with people we have placed on fixed term contracts. Therefore we are ideally placed to fill construction recruitment gaps in London.

If you are struggling to recruit construction workers in London then give our team of specialist construction recruiters a call on 01992 807911 and we will be happy to help.

 

Schools and Colleges Failing to Help Construction Recruitment Gap

We all know that there is a skills gap in the construction industry. As a country the UK simply does not train enough young people to work in construction making it hard for construction companies to recruit the skilled staff that they need. Shortages could get worse in the next few years as uncertainly over Brexit may discourage the 12% of the construction workforce who are immigrants from staying. With another 19% of the construction workforce due to retire in the next five to ten years it is vital that training and recruitment into the construction industry works smoothly. Two new studies released this month highlight the scale of the problem.

A new survey by Redrow found that 50% of young people said they had not been given any information about careers in construction. This included verbal conversations with teachers and careers advisors as well as the careers literature available in their school. While schools were bad at discussing construction careers with young people the same survey found that 72% of parents have never discussed the prospect of a career in construction with their child. It is perhaps not surprising therefore that 52% of young people surveyed reported that they had never considered a career in construction.

Much of the reluctance among parents to discuss construction careers with their children was down to the perception of it being a low skill and low wage industry. These attitudes have carried over into their children with 55% of young people believing a career in construction mainly involves manual labour while 19% of young people believe a career in construction does not require any qualifications beyond GCSEs. There is, therefore, still a long way to go to educate schools, parents and young people about the opportunities available in construction.

While there is work to do to get more young people to apply for construction careers another new report suggests that more needs to improve the training new recruits receive. Research by the Unite union has found that 89% of people beginning a construction training course are studying for classroom based qualifications. The main qualifications recognised in the construction industry are NVQs which can only be gained with significant time on site. Without an NVQ it is not normally possible to get a Construction Sector Certification Scheme (CSCS) card which is required to get work on sites.  192,500 people started a classroom based construction course in 2015/16 compared to just 21,460 people who started an apprenticeship.

So, it seems that if we want to solve the problems with recruiting enough skilled workers into the construction industry there is still a lot to do. As an industry we need to make sure that the training we offer is up to scratch and then do more to make sure young people are aware of the careers and opportunities available.

Going the Extra Mile to Support Our Clients With Expert Construction Recruitment

In our last blog we looked at the anticipated growth of the construction industry in the UK, and the consequent increase in demand we are likely to see for construction workers between 2017 and 2021.

At RedRock Recruitment we take a strategic approach, and are already planning and working hard to fulfil the future needs of our clients.

One of the main advantages that we offer our clients is the scope of sectors that we cover, and the flexibility of construction experts that we have on offer. Our extensive database contains skilled people who are ready and waiting for roles in London and the South East on a permanent, contract or short term basis.

Our business is also differentiated by the fact that we are well-connected in the industry – we know exactly where to find expert staff if you need them, and can call upon our contacts if you are looking for a specialist who might be interested in being approached, but who is not on the open-market.

Working with our clients to manage their needs

We also understand that the best way to fulfil our clients’ needs is to work closely with them and develop an ongoing and sustainable relationship.  Our aim is to provide a no-fuss recruitment process tailored specifically to the needs and preferences of each of our clients, so how do we manage this?

Reference and qualification checking

We understand how vitally important it is to have the right person for the role and to ensure that your time is not wasted. So, we always double-check references and verify qualifications, to make sure that when we send you a candidate, you know that they are appropriate and ready to start work.

Providing support

We send a representative to check on your new recruit on the day that they start work – this ensures that you are happy and everything is in order.

We also provide ongoing support to our candidates to make sure that you have a good fit with your role.

Our experience

Our directors have over 20 years’ experience of working in construction recruitment throughout the South East and on some of the region’s most notable projects.

Superior service

We are delighted to say that our client retention is first class and that is because we work hard to provide a service which exceeds traditional expectations. This approach is integral to the way that we work, and includes added-value aspects such as supplying RedRock branded PPE if this is required by our clients.

Are you looking for construction staff and want to establish a relationship with a firm who will expertly manage your needs? Learn more about us or get in touch and we will be happy to discuss your requirements.

 

Construction Recruitment Boost with 179,000 New Jobs Expected in the Next 5 Years

The CITB (The Industrial Training Board for the Construction Industry) has published a report which anticipates steady growth in the UK construction industry during the period 2017 to 2021, despite the fears around political and economic uncertainty which have been clouding the picture for a while.

During 2017 to 2021 construction output is anticipated to grow at an average of 1.7% (this is just below the 1.8% expected average GDP growth).  This means that 179,000 new jobs will be created.

Infrastructure projects

A large proportion of the increase is expected to come from infrastructure projects which account for 45% of the anticipated construction growth. This means that the projections are heavily dependent on a number of high profile planned infrastructure projects – notably the Hinkley Point C and the Wylfa Newydd nuclear power stations and the first phase of High Speed  2, the UK’s planned new high speed rail network, all of which are due to start construction during this period. Private house building is also expected to continue to do well.

There are also marked regional differences with London, the South West, Wales and the North West expected to experience strong growth, whilst the North East and Scotland are likely to see a decline. Greater London in particular will see construction output rise by an annual average of 2.4% over the five year period.

What will be the effect on construction jobs?

The report anticipates that 35,740 new construction workers will be required each year to match growth, so suitably qualified personnel will be required in larger numbers. The CITB believes that some construction professions will be in particular demand:

  • Non construction professionals, technical and IT staff – 5,240
  • Wood trades people and interior fitters – 3,850
  • Electricians and installers – 2,250
  • Other construction professionals and technicians – 2,240
  • Other construction process managers – 2,150
Construction recruitment will require electricians
Electricians will be in demand

Good news for the construction industry and construction recruitment

This anticipated growth is good news for the industry and for construction professionals who have recently faced a degree of uncertainty, not least because of the question marks which still hang over the Brexit process.

At RedRock Recruitment we specialise in supporting construction companies to find the right people with the right skills to meet their needs, and as a full service agency, we are well placed to supply the professionals who are in the greatest demand – from general labourers, through all of the trades through to construction management professionals, in London, the Home Counties and throughout the Southeast.  Our rigorous vetting and recruitment process saves construction companies the headache of undertaking onerous recruitment themselves. We also have access to skilled and trusted trades people who can be supplied on short notice to support your construction project.

To find out how RedRock can support your business, find out more about us or get in touch today.