However, builders are set to further invest in modern methods of construction (MMCs)as they aim to improve productivity and building design.
From a survey of 100 firms in the housebuilding sector, the research found that housebuilders plan to create 40,000 fewer jobs over the next five years than they had expected a year ago – down 22% to a pipeline of 139,000 jobs over the five-year period.
The survey also found the housebuilding industry to be slightly less optimistic about the ongoing Brexit-related uncertainty, slipping from 7.2 last year to 6.9, with 10 being the most positive level of expectation.
And while firms expected to invest 31% of their current annual turnover back into their business, this was down from the anticipated 35% in the last report.
However, despite the downward revisions, housebuilders nevertheless reported growth expectations of 29% of current business turnover over the next five years, up from 28% last year.
The gap in skills, however, remains an ongoing issue, with 31% of firms reporting a skills shortage at a national level, and 29% having had trouble recruiting in the regions where they operate.
Moreover, Brexit was found to be exacerbating the skills shortage, with half of firms stating that it was making recruitment for specific roles more difficult, while just over a quarter said that access to EU labour was a key challenge for their business.
However, the report also found that 69% of respondents were investing in staff training, and 51% were setting up apprenticeship programmes.
Stewart Baseley, executive chairman of the Home Builders Federation, commented: “While output is up an unprecedented 74% in the past four years, the industry faces some huge challenges as it strives to meet the housing needs of the country.
“Housebuilders are investing significantly to address these challenges and ensure the industry has the capacity and skills to deliver even more, high quality homes,” he added.
In an effort to boost productivity and supply, the results showed an increasing emphasis on modern methods of construction – with firms expecting to invest 24% of current annual turnover in new building techniques in the forecast period, up from 20% expected last year.
Within this, 68% of firms are investing in modular housing, and 56% using panelised systems.
Despite the slip in firms’ optimism and slashed job pipelines, however, commentators remained positive about the industry’s direction and investment strategies
Commenting on the report, regional director and national head of housing at Lloyds, David Cleary, said: “It is reassuring to see the sector confronting these challenges head on by investing and planning for business growth, prioritising staff training and looking at more innovative new building techniques. This has the potential to boost productivity and, more importantly, increase the pipeline of new homes that the nation badly needs.”
Craig Hall, new build manager at Legal & General Mortgage Club, also commented: “Today’s results paint a similar story to last week’s State of Trade Survey from the Federation of Master builders, with a third of housebuilders citing the availability of skilled labour as a barrier to growth, both at a regional and national level.
“However, this is not for want of trying,” he added. “Nearly 70% of firms are investing in modular housing and 56% in modern methods of construction like panelised systems. The government recently set a target of 300,000 new homes per year to keep up with demand, and whilst there is still a way to go, these figures highlight a genuine attempt to grow the sector.”