Building employment insight

15/03/2018

Private Housing remains the largest employment sector within the built environment, a trend which is set to continue with the Governments’ commitment of 300,000 new homes to be built.

Few industries have skill shortages more acute than the built environment.  The need for companies to have access to sufficient people with the right skills is an economy-wide challenge and one of the top areas of concern for industries bodies, such as the CBI, as well as companies. In residential housing, the challenge is arguably greater than the norm, with 85% indirect employment in its site workforce, and a greater percentage of EU workers than construction as a whole.

We break down employment by sector within the built environment and summarise forecasts for the next 12 months which undoubtedly perpetuates the skill shortage challenge.

Infrastructure: Infrastructure is expected to be the strongest sector in output terms, driven by a small number of huge projects such as High Speed 2 (HS2) and new nuclear builds at Hinkley Point and Wylfa. Annual average growth of 3.1% over the five years to 2022 is likely to peak in 2019.

Residential/Housing: Housing output, both public and private, is expected to grow by 2.8% and 2.2% respectively which will considerably reduce the dependence on infrastructure to buoy up the sector.

Commercial Construction: Office space was the sector identified as the most vulnerable by a more cautious investor and developer attitude, bringing new projects forward due to Brexit uncertainties. This is proving to be the case with new orders for office construction on a downward trend and output growth weakening significantly.

Repair and Maintenance (R&M): Growth across all the new work sectors is projected to average 1.5% a year over the 2018 to 2022 period, with the R&M  sector seeing slightly slower expansion of 1.1% per annum. The prognosis for housing R&M is for significantly stronger than long-term trend growth (1.2%) largely due to the potential rework across public high rise.

Retail Construction: Retail construction continues to be impacted, largely negatively, by the changing shopping habits of British consumers, leaving only leisure construction of the big three components of the commercial sector showing growth in the short term.

Education and Health Construction: With the focus on the residential and infrastructure sectors, public expenditure on education and health construction is projected to fall. This is only in part mitigated by an increase in defence work as part of the Army Basing Plan, although this will complete in 2019.

For more information regarding employment and skill trends across the UK within the built environment, contact marketing@potensis.com

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