The construction industry in the United Kingdom is considered one of the world’s largest. The sector is worth 370 billion pounds or $447 billion. It’s fast-growing, but it’s experiencing various problems. These problems are expected to hinder the industry’s growth in the coming years. One of the country’s biggest problems is the lack of workers.
Manpower Shortage
Various construction projects were stalled last year because of the lack of workers. The industry is expected to face the same problem this year. The main reason for the shortage is the Brexit vote. After the UK voted to leave the European Union, many foreign workers left the country. As a result, construction workers decreased by 24% from 2016 to 2017.
Another reason is that the construction industry in the United Kingdom was hit hard by the COVID-19 pandemic. The lockdown measures implemented by the government led to a decrease in construction activity. The number of construction projects decreased by 30% from March to May 2020. In addition, the lack of workers led to many foreign workers leaving the country. This has led to a shortage of workers in the construction industry.
The manpower shortage has led to a domino effect in the sector. The first domino to fall is wages.
The decrease in the number of construction workers has led to an increase in wages. Wages have increased by 5% since 2016. The rise in wages is one of the reasons why construction projects are delayed.
The shortage of workers has also led to increased prices of homes. The cost of a new home has risen by 10% since 2016, and the cost of office space has increased by 7%. The rise in expenses is one of the reasons why the construction industry is struggling.
One way to deal with this problem is to hire more overseas workers into the country. In addition, various construction firms in the country should help overseas workers to get a CSCS green card, which is essential for working in the construction industry. By doing this, businesses can make the UK construction industry more accessible to overseas workers.
The other way to deal with this problem is to increase training for British workers. The government should provide more funding for apprenticeships and other training programs. This will help to increase the number of skilled workers in the country.
Materials Shortage
Another problem that the construction industry is facing is the shortage of materials. The main reason for the shortage is the increase in costs. The cost of building materials has increased by 20% since last year. It has led to a rise in the price of construction projects.
The shortage of materials is because of the pandemic. Cross-country shipping has become more complex, and the price of imported goods has increased. It has led to a decrease in the supply of construction materials. The pandemic has also led to an increase in the cost of materials. Steel and concrete prices have increased by 10% since the pandemic. The rise in prices is one of the reasons why construction projects are delayed.
To deal with this problem, businesses should try to find alternative suppliers. Local suppliers may be more expensive, but they can provide a steady supply of materials. Companies should also try to stockpile materials when they are available.
Another way to deal with this problem is by using recycled materials. This can help to reduce the cost of construction projects.
Financing Problems
The construction industry is also facing financing problems. The main reason for this is the Brexit vote. After the UK voted to leave the European Union, many banks stopped lending to businesses in the country. It has made it difficult for companies to get loans for construction projects.
The other reason for the financing problems is the pandemic. The pandemic has led to a decrease in economic activity. It has led to a decline in demand for construction projects.
To deal with this problem, businesses should try to get loans from alternative lenders. Many online lenders are willing to lend to businesses in the UK. Companies should also try to raise capital from investors.
The Current State of The UK Construction Industry
The construction industry is expected to continue to grow in the coming years. However, it’s facing various problems that need to be addressed. The most common is the pandemic and Brexit. Both have led to unforeseen consequences in the industry and will continue to damage the sector. However, there are many ways to deal with these problems, and by addressing these problems, the industry can continue to thrive.
