Like many industries, the construction sector is currently dealing with a number of challenges brought about by the conflict in Ukraine, the lingering fall-out from Brexit and soaring energy costs.
Despite that, a recent rise in output, combined with job vacancies and high labour rates are encouraging signs.
Construction output rises for the second consecutive month
The most recent ONS figures showed a 0.4% rise in construction volume terms in August, following the 0.1% increase the month before.
This rise was driven solely by an increase in new work (1.9%), which compensated for the decrease (2%) in repair and maintenance, a segment impacted by the high price of construction materials and work being put on hold due to the cost-of-living crisis.
At a sector level, the main contributors to August’s small increase were infrastructure (5.3%), private industrial (4.3%) and private housing (1.7%).
Vacancies remain high
Skills shortages continue to be a problem across the industry. ONS employment figures showed the number of available jobs in construction rose to 45,000 over the last three months, bucking an economy-wide trend of a declining number of available jobs.
That figure is a slight rise on the 43,000 and 44,000 estimated vacancies in the two prior three-month rolling periods.
HS2 brings an influx of new jobs to the West Midlands
As predicted, the HS2 high-speed railway project has brought a huge number of jobs to the West Midlands as it enters its main phases of construction.
In total, a workforce of more than 27,000, spread across 350 sites between London, the Midlands and the North West, are now supporting HS2. Of that, 6,838 roles are employed in the West Midlands.
So far, the project has welcomed over 950 new apprentices UK-wide and employed 539 previously out-of-work people in the West Midlands.
Self-employed labour rates hit a record high
Pay rates of self-employed tradespeople have hit a record high, with average weekly pay rising above £1,000 in London, the South East and East of England.
Recent figures gathered by Hudson Contract found that rates on building sites rose by 2% during August, driven by the increase in construction levels along with the shortage of skilled tradespeople. Plasterers saw the biggest pay increase, with salaries rising by 10.5%.
While there are undoubtedly still clear challenges facing the construction industry in both the immediate and longer-term future, there are early signs of encouragement in terms of new projects being launched, along with plentiful job opportunities for those who hold the necessary qualifications.