Private house-building fuels growth in Wales despite rise in skills shortages

Private housing leads construction growth in Wales despite rise in skill shortages

RICS UK Construction Market Survey Q4 2014

Construction workloads increased again in Wales in the final quarter of 2014, albeit at a slower rate, but private housing saw the strongest growth, despite the shortage of bricklayers reaching a record high.

Over a third (36% net balance) reported that workloads in the construction sector had grown in Wales in Q4 2014 with 57% more respondents saying that the private housing sector was fuelling the greatest growth, followed by the private commercial sector (48%).

Around 60% of respondents across the UK reported that material shortages, skill shortages and financial constraints were impeding further sector growth. In Wales 50% of respondents reported a shortage of ‘other construction professionals’ (non-quantity surveyors or blue collar workers) – the seventh consecutive quarterly rise.

Despite these factors and anecdotal evidence that the upcoming election in May is creating industry uncertainty, confidence in Wales remains firm with 74% more respondents expecting workloads to increase and 71% more expecting employment to increase. Across the UK members’ anticipate growth in workloads of 3.4% in 2015 with jobs in the sector expected to rise by a further 3%.

Elsewhere, the infrastructure sector continued to see what has been a much steadier pace of growth over the last 12 months and in Q4 2014, just 11% more respondents reported a rise in workload activity in Wales.

RICS Director of the Built Environment, Alan Muse, said:“Labour shortages have become increasingly onerous in every area of the sector since the industry began to recover in mid-2013, with bricklayers and quantity surveyors in particularly short supply. Now that workloads are rising and optimism is growing, the practical challenges are in providing the skilled labour the industry needs and in alleviating the financial constraints, which saw nine months of decreased lending in 2014.

“The political challenges in the run-up to the election are around shoring up industry confidence to ensure the framework for effective planning and delivery of projects are in place to create long-term growth that is spread across the UK. This will also enable the investment that the industry needs to raise productivity and encourage new training initiatives.”

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