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Civil engineering sector set for growth in the Midlands - but key issues remain

The civil engineering sector in the Midlands is set to grow in the coming year – but labour shortages, rising costs and a drop in road projects are key issues for firms in the region. Midlands firms have contributed to the Civil Engineering Contractors Association’s (CECA) latest workload trends survey and it reveals how the sector is expected to fair in the coming 12 months.

More than half the firms surveyed (53 per cent) said that orders had risen with 28 per cent saying that their order books had decreased. Areas such as renewable energy works, water & sewerage and railways have grown but preliminary works and motorways & trunk roads have seen a drop off. On balance, 30 per cent of businesses expected workloads to increase in the next year and this trend will continue to impact the already tight labour market, according to the survey.

Firms in the civil engineering sector reported an increase in staff over the past year and, on balance, 43 per cent were forecasting a rise in skilled operatives and 38 per cent were expecting an increase in wider staff employment. That is contributing to a rise in staffing costs – 6.1 per cent for engineering staff and 4.7 per cent for administrative staff. Other costs also continue to rise although the rate of the increase has slowed compared to a year ago. Aggregates, bricks and clay products have all risen by seven per cent or more. Fabricated steel is also up by seven per cent although it was rising by more than 13 per cent a year ago.

The rate of inflation has also dropped on timber and plastic but it is still relatively high at 7.7 per cent and 6.3 per cent respectively. The rate of increase on fuel prices has also fallen sharply but is still more than four per cent. Lorraine Gregory, regional director of CECA Midlands, said: “This survey offers a real insight to the way civil engineering firms have performed over the last 12 months and, crucially, their expectations for the next year. “There is no doubt that costs are still a big headache and, while the rate of inflation has fallen compared to 2022, businesses have still seen a substantial increase on materials and general running costs.

“On balance, companies believe they will grow over the next year and, of course, that means increasing their headcounts. “However, as we know, the labour market is already extremely tight and with more firms looking to grow, it is only going to get tighter. “I’d encourage firms to get in touch with us here at CECA as we can support on training and, also, chat through areas of best practice on how to grow a workforce by looking at different ways to recruit. “On the whole, the sector remains positive in the Midlands but it’s vitally important that those issues raised start to be addressed.”

This was posted in Bdaily's Members' News section by Matt Joyce .