Construction’s skills crisis could put a break on growth in the sector. Tackling low productivity is essential if construction is to remain affordable
The labour force is construction’s Achilles’ heel. While other sectors can use scarcity of labour as a prompt for investment in improved productivity, construction firms typically pass increased costs on to clients. So, while productivity in UK manufacturing increased by over 70% in real terms during the past 20 years, construction efficiency barely improved, contributing to much higher cost escalation than in the wider economy.
As a challenge, productivity in the UK is doubly important at the moment. Economy-wide productivity has barely moved since the downturn in 2008 - significantly affecting UK competitiveness. Additionally, increased productivity opens up the prospect for non-inflationary growth in living standards. Recent improvements in labour output and earnings have helped to underpin the UK’s strong recovery.
With crucial infrastructure projects such as the Midlands Mainline electrification scheme being cancelled, in-part due to delays and higher costs, the impacts of our industry’s inefficiency are spilling out into the real world. Given that cancelled infrastructure investments have long-term implications for regeneration, regional competitiveness and a balanced economy, it’s fair to say that