Yorkshire’s construction sector suffers as labour shortages and declining workloads increase

The construction market in Yorkshire and Humber continues to suffer.

The latest quarterly RICS (Royal Institution of Chartered Surveyors) Construction Market Survey shows that the construction sector in the region is suffering with labour shortages, as well as also a decline in workloads.

During the first three months of the year (Q1 2015), 46% of the region’s construction professionals noted labour shortages as an ongoing issue for them, whilst 34% of respondents cited a rise in workloads.

This is slight decrease from the previous quarter (Q4 2014) when 42% of Yorkshire and Humber’s construction workers were experiencing an increase in workloads.

However, the private sector continues to steadily grow in Yorkshire and Humber, with 46% of respondents reporting a rise in housing workload activity. But private commercial space and private industrials saw a drop in workload activity during the first three months of this year.

Across the infrastructure sector, respondents cited the fastest growth since RICS began recording UK construction market data in 1998.

29% of Yorkshire and Humber’s construction professionals saw a significant rise in infrastructure workload activity during Q1 2015 compared to Q4 2014, when only 19% of the region’s respondents reported an increase in the construction of rail and road sub-sectors.

Andy Hirst of Faithful + Gould, who is a member of the RICS Yorkshire and Humber Regional Board, said: “The forthcoming general election appears to be stifling activity in some of the region’s sectors as organisations delay spending. The skills shortage is still affecting business. Salary expectations in the marketplace continue to rise, though fee levels are not yet catching up with the curve.”

Alan Muse, RICS director of the built environment, added: “Despite the outward optimism, there are some very real unknowns which are impacting on industry, including the general election, the UK’s relationship with Europe and skills shortages.

“The upturn in workloads in some sectors has led to more competitive tendering, particularly across public sector projects, but a lack of accessible finance is now affecting a net balance of 55 percent of our members, and this will be felt most keenly among the small-medium sized SMEs.

“Now that material shortages are becoming less of an issue, 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.”