A shortage of skills and contractors is hindering construction projects in Wales, new research suggests. According to the RICS construction monitor for Q1 2023, the shortage of available labour in the sector is impacting growth in construction activity in Wales, with demand outstripping the supply of available contractors.
The survey found that, although there are increases in construction activity, over 70% of chartered quantity surveyors in Wales said skills shortages are limiting the sector’s ability to take on more work. In the latest analysis, 67% reported a shortage in quantity surveyors, 54% reported a shortage in other construction professionals and 61% reported a shortage in bricklayers.
Despite this, a net balance of 11% of those surveyed in Wales reported that construction workloads had increased in the first quarter of the year. This increase was almost entirely driven by publicly-funded house building projects and other public sector works. But falls in private house-building and private commercial construction were also reported.
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Looking ahead, a net balance of 12% of respondents expect workloads to rise over the next year, up from -4% the quarter previous. This is in line with the UK level, where a net balance of 15% of surveyors expects workloads to rise.
While a net balance of +17% of Welsh chartered surveyors expect employment levels to increase over the next year. However, the survey suggested that skills shortages reported across the sector means firms will find it challenging to recruit the staff they need.
Hugh Stephen Pritchard, in Benllech, said: “Significant increases in labour and material costs are a challenge and there is also a shortage of available labour”.
Simon M Davies of Simon Davies in Swansea said: “Demand for building contractors is outstripping the supply of available contractors”. While Terence Jones of Terry Jones CQS Ltd in Swansea said: “Inflation over the last 12 months has made contractors cautious.”
Simon Rubinsohn, chief economist at RICS, said: “The negative mood around development has eased somewhat in recent months with the workload trend stabilising away from infrastructure where the trend remains more positive. A key challenge for the sector continues to revolve around labour shortages in general and skills in particular. Unless addressed, this could prove to be a significant drag on the ambitions of the construction industry.
“Unsurprisingly, credit conditions remain restrictive for now but there is a sense that they could ease as the year wears on. Whether this improvement materialises remains to be seen in the face of the ongoing banking stress in the US and how this plays out around the globe.”
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