Construction sector held back by lack of skilled workers
Construction growth in London is being held back by a lack of sufficiently skilled workers and the impact of Brexit-related uncertainties on investment decisions, the Royal Institute of Chartered Surveyors (RICS) has found.
Workloads in London's construction and infrastructure industry rose moderately in the three months leading to 31 October, with rail and energy set to be the fastest growing sectors in the coming year.
Growth of 14% in construction and infrastructure workloads was reported throughout the quarter, but respondents to the RICS survey noted that growth was being held back.
Skill shortages, long-running issue, was still seen as an impediment to growth, as those taking part in the survey, released on Thursday, said they had suffered from a lack of quantity surveyors and other professionals across London. A shortage of workers with specific trades was reported by 46% of respondents.
Despite efforts by Downing Street to boost the workforce and the prominence of apprentices through an apprenticeship levy introduced by the Chancellor in May, just 42% of respondents, said they felt government-funded programmes "are only moderately effective" on a national scale, and that less than half of employers hiring apprentices viewed them as a long-term solution to maintaining their staffing levels.
Jeffrey Matsu, senior economist at RICS, said "While activity in the sector has moderated, growth and growth expectations remain in positive territory."
"Uncertainties due to Brexit continue to weigh on companies' investment and hiring decisions, and banks appear to be adopting a more cautious stance to providing finance. Meanwhile, challenges related to an inadequate supply of skilled labour are as pronounced as ever," added Matsu.
On a sector level, the infrastructure and public non-housing sectors reported the biggest increase in workloads, however the figures remained broadly stable across the board, with respondents expecting the biggest increases to come from the rail, road and energy sub-sectors to post the most significant level of growth in the coming year.
On a national level, the shortage of workers hampered activity and profit margins, and although it dropped from 79% to 69%, the majority of British firms surveyed noted that financial constraints had remained the most significant challenge to operations moving forward.