Shortage of Skilled Labor driving up Construction Costs in the UK

Published Date : Dec 07, 2015

A rising shortage of skilled personnel in the construction sector is causing the biggest building contractors in Europe’s capital to turn down half the bidding opportunities in the city.

According to a poll of UK construction contractors undertaken by AECOM, a support services company, shortage of skilled labor in the city is driving up prices so high that contractors are also required to put up the prices and turn down work opportunities from clients or projects that the contractors perceive to be high risk.

A shortage of specialists in joinery, brickwork, concrete, and other areas is leading to rise in contract costs by as much as 10 percent in London this year as compared to the prices in the last year, the poll has said.

The poll said that parts of the construction industry in London are already curtailing exposure to the residential buildings market owing to the fear that the prices of houses in the capital city may start to falter.

The economic director of the UK-based construction industry trade association, the Construction Products Association (CPA), Noble Francis, said that construction contractors were retuning back to their clients so as to renegotiate the projects that were agreed 18 months ago.

Although the CPA forecasts a significant rise in the building sector in Europe in the next two years, the issue of shortage of skilled personnel raises questions as to how achievable the overall growth prospects are.

The government has promised to tackle the issue of housing shortages by implementing measures aimed at accelerating construction activities. However, building contractors have already started to slow down production in areas where prices are not rising so as to offset the high rise in labor costs.

Barratt, the biggest housebuilder of Britain, has launched only 49 developments this year, a decline from 80 at the same time of the previous year, and is operating from 380 sites, as compared to 395 sites the previous year.