New construction skills forecast reflects turbulent times

2022 was a tough year.

Russia’s invasion of Ukraine was arguably the biggest conflict since World War Two.

Meanwhile at home, rising inflation, interest rates, and a cost-of-living crisis took hold.

The global and domestic upheaval impacted many industries including construction, one of the UK’s biggest growth drivers.

This turbulence is reflected in our new Construction Skills Network (CSN) report.

Just seven months ago, in our previous CSN, we estimated an additional 53,200 construction workers were required, per year, to meet construction demand from 2022-26.

The equivalent figure for 2023-27 is 44,980.

Meanwhile, forecasted growth for 2022-26 was 3.2%.

Growth for 2023-27 is predicted to be just 1.5%.

The short-term economic picture is tough. However, I’m pleased to write that the long-term outlook is brighter.

Output

Construction businesses faced many challenges in 2022 including raw material price inflation, wage inflation and difficulty finding skilled workers.

Despite these obstacles, construction output was better than expected; annual growth has been around 4%.

However, with the UK set to face a period of recession and Gross Domestic Product (GDP) declining in 2023, it’s unlikely that construction will continue out-performing the economy.

The next 18 months will be hard for many people in the UK, there’s no getting away from that.

The Organization for Economic Cooperation and Development has predicted that the global energy crisis, compounded by Russia’s invasion of Ukraine, will see our economy contract more than any other G7 nation.

Fortunately, the expected recession is likely to be shallower in terms of the declines in GDP seen in the recessions of 2008 and 2020.

Output is predicted to return to growth in 2024.

And of the nations and regions, Yorkshire and Humber (2.2%), East of England (2.2%) and Greater London (1.9%) will lead the way on construction growth.

Recruitment

Arguably the biggest challenge facing the construction industry from 2023-27 is recruiting workers.

This is due to a high level of job vacancies and low unemployment.

The high number of vacancies means it is important for construction companies to make use of the recruitment support available to them.

Developing the workforce will help the construction industry contribute to growth opportunities.

This means building the homes the country needs, working on transport and energy infrastructure and retrofitting the built environment to meet net zero targets.

Our new CSN report predicts that the most in-demand construction roles, from 2023-27, will be for architects, civil engineers and trade plant operators, all of which will see annual average growth over 1%.

Investment

CITB will do everything it can to support industry’s skills and training needs during these difficult times.

Our latest Business Plan, published in May, reflects the needs of employers and outlines the £233m investment and support for skills we’re providing industry in 2022-23.

Since its publication we have introduced a range of major initiatives.

In August we announced an £800,000 investment in a new Employer Network Pilot project that could revolutionise the way industry receives funding for training.

In October we renewed funding (£780,000), on the On-Site Experience Hub project in Wales.

And in December CITB awarded contracts, worth £10.5m, to four training organisations so they can provide 10,500 free Institute of Leadership and Management courses for industry.

Moving forward, CITB is set to introduce an apprenticeship taskforce across England, a team that will work with employers on their apprentice needs.

Our new Industry Impact Fund, to be launched in Spring, will seek solutions from businesses on how to support productivity and diversity in construction.

Heart

The next 18 months won’t be easy however, I remain inspired by the construction industry’s resilience, shown during the pandemic and throughout the tough times in 2022.

I take heart from the long-term CSN picture and I am confident that the range of initiatives CITB introduced in the last 12 months will help employers and new entrants across the UK.

CITB will strive to attract and train a diverse range of recruits for industry.

We will equip them with modern skills for rewarding construction careers.

I look forward to working with stakeholders in the challenging times ahead and to emerging stronger when the recession ends.

Tim Balcon
CITB Chief Executive
January 2023