45,000 construction jobs to go this year

A new report out today forecasts that the construction industry will shed 45,000 jobs this year and output will shrink by 3%.

The annual Construction Skills Network report - delivered in conjunction with construction employers from across the UK, outlines that growth is expected to be slow and uneven over the next five years – with a 4% increase in output expected in 2013, followed by dips to 2% in 2014, 3% in 2015 and 2% in 2016 which is lower than previous long term trends.

Judy Lowe, deputy chairman CITB-ConstructionSkills, (the Industry Training Board and Sector Skills Council), said: “The Construction Skills Network clearly shows that our industry is in for a tough time. Infrastructure investment, the first nuclear power plants and the revival of private housing will help, but the hard fact remains that despite an increase in growth from 2013 onwards, output and employment levels in construction will not have reached their 2007-8 levels by the end of the forecast in 2016.”

Whilst increasing economic uncertainty has plagued the construction sector, changes to working practices have also contributed to the gloomy forecasts – with the biggest falls in employment in the period arising from the loss of manual trades. By 2016, demand for painters and decorators is expected to be 6,300 below 2010 levels, manual labourers 3,000 below and bricklayers 2,500.

The greatest growth in demand is predicted to be for construction managers – up 30,000 by 2016 on 2010 figures, marking a real change in the operation and make-up of the industry. Judy Lowe added: “The sluggish return to growth means that we could be talking about a lost decade in construction and a loss of key trade skills. But, the real shock is the impact that cuts to public sector spending has had.

“The report shows that public housing is set to fall by 25% this year, public sector non-housing by 24% and a further 10% fall is expected next year in both sectors. That’s a big deficit for other sectors of the construction economy to make up.”

She continued: “Construction is an economically important industry – contributing 8% to GDP and employing 3 million workers in its supply chain. Construction has the potential to stimulate the economy and we are working with government to look for ways to return the UK to growth”.

In the regions and nations, there are mixed forecasts. The picture is positive for London and the South East – which accounts for 60% of employment growth. After a dramatic period of decline, Northern Ireland is set to grow 2.1% over the 5 year period, well above the UK 1.4%. In Scotland, growth remains second only to London – whilst Wales continues to deliver higher than average growth results. In other English regions however, particularly in the North West (-0.9%) and West Midlands (-1.1%) forecasts show a period of declining output, as major Building Schools for the Future projects come to a close.

The encouraging news is that beyond this year and the early part of 2013, overall construction starts to improve and grow steadily. Despite this growth, however, perhaps the most striking figure of the whole report is that by 2016 output and employment will still be 5% below their respective 2007/8 peaks. So in five years’ time, we will still not be back where we were previously.