{"id":431527,"date":"2021-01-29T08:50:39","date_gmt":"2021-01-29T08:50:39","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=431527"},"modified":"2021-02-02T09:30:08","modified_gmt":"2021-02-02T09:30:08","slug":"labour-shortages-could-raise-rates-at-least-10","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/brexit\/labour-shortages-could-raise-rates-at-least-10-29-01-2021\/","title":{"rendered":"Labour shortages could raise rates \u2018at least 10%\u2019"},"content":{"rendered":"

Difficulties sourcing labour \u2013 following a drop in the number of EU-born workers in the UK \u2013 are likely to push up rates by at least 10 per cent, recruiters have warned.<\/p>\n

A decline in the number of EU-born workers<\/a> in the UK construction industry, combined with a surge in demand, has created a squeeze on labour. Contractors are reportedly finding it harder to recruit workers at existing rates and are facing cost increases.<\/p>\n

Darin Burrows, director of recruitment agency City Site, told Construction News<\/em> there had been a growing squeeze on unskilled workers. \u201cWhat we\u2019ve seen is labour rates already creeping up, particularly labourers, because we\u2019re finding it harder to find eastern European workers.\u201d Burrows added that, in the past, around 80 per cent of the labourers on his books had been from eastern Europe. Dry-lining, another part of the sector with a large eastern European workforce, is also in short supply, he said.<\/strong><\/p>\n

Burrows added that higher costs will soon start hitting contractors, if they are not already, with the shortage leading to the cost of labourers, as well as skilled trades, rising at least 10 per cent this year. He added: \u201cI\u2019ve already told my biggest customer that I cannot hold the rates we\u2019re currently charging them much longer.\u201d<\/p>\n

Lignum Recruitment head of interiors Nathan Raven echoed Burrows\u2019s view, and agreed a 10 per cent rise is possible. He added that getting \u201cgood-quality\u201d workers would be an even bigger challenge. \u201cIt\u2019s not necessarily just getting hold of the labour, but getting hold of workers that are up to the usual standards.\u201d This will lead to the best workers having more power to command premiums for their work.<\/p>\n

Iain McIlwee, chief executive of the Finishes and Interiors Sector (FIS) trade body, said his members were growing increasingly concerned about the situation. \u201cOver 40 per cent of our members are currently reporting a shortage and 60 per cent are expecting one; how bad it will get, we don\u2019t fully know right now, but we anticipate that it will impact rates and programmes,\u201d he said.<\/p>\n

Recent data from the Office for National Statistics revealed that more than one in four EU-born construction workers had left the industry<\/a> between September 2019 and September 2020.<\/p>\n

Earlier this week, new data from the ONS showed construction vacancies in the last quarter of the year had reached pre-pandemic levels<\/a>. Construction was just one of two industries to report a higher level of vacancies compared to the same time in 2019. Construction Products Association economics director Professor Noble Francis told CN<\/em> the increase was likely due to a combination of increasing demand and a fall in the supply of labour as more EU workers leave the country.<\/p>\n

Labour shortages are not uniform across the UK, with major cities bearing the brunt. Raven said contractors in major cities such as London and Birmingham are facing the biggest challenge in getting good workers at existing prices.<\/p>\n

This demand and supply mismatch in cities is leading to workers being brought in from further afield. Monika Slowikowska, director of London-based residential contractor Golden Houses, told CN<\/em> that subcontractors on her jobs had brought in workers from Leicester and Nottingham in recent months.<\/p>\n

Burrows believes the fall in EU-born workers is down to four factors: the weaker pound since 2016, relatively healthy construction markets on the continent, a more hostile environment towards European workers since Brexit, and COVID-19. He said: \u201cBy the time you factor all these things in, is it any wonder we\u2019re seeing a deluge of people either go home or just don\u2019t want to work?\u201d<\/p>\n

McIlwee has called for a short-term relaxation of immigration restrictions<\/a>. \u201cThis [labour availability] is the number one concern for the FIS as we move into 2021. The infrastructure and time just isn\u2019t in place to solve this; realistically we need to see some relaxation of the rules to give us time to transition.\u201d<\/p>\n

There is a chance a change in demand could rectify the issue. \u201cThe problem might go away a little bit through demand [falling],\u201d Burrows said. \u201cBut I don\u2019t expect to see that this year, I expect to see that in 2022.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Difficulties sourcing labour \u2013 following a drop in the number of EU-born workers in the UK \u2013 are likely to push up rates by at least 10 per cent, recruiters have warned. A decline in the number of EU-born workers in the UK construction industry, combined with a surge in demand, has created a squeeze …<\/p>\n","protected":false},"author":26091,"featured_media":384792,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[564,575],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n