The findings came in the third State of Trade survey for 2016 released today by Build UK and highlighted an industry belief that workloads would tail off in the final quarter of the year, although output is expected to rise in the next 12 months.
Build UK found that labour shortages prevented 25% of contractors from bidding for work in the third quarter of 2016; a marked increase on the 16% reported in the previous quarter.
The issue was also reflected in the tightening of industry capacity, with 85% of contractors operating at over 75% of their capacity and 49% operating at over 90%.
The rising demand for skilled labour is also impacting costs and 55% of contractors reported an increase in labour costs when compared to the previous quarter. Compared with a year ago, 60% of contractors said their labour costs were now higher.
According to the Q3 results, the trades proving the most difficult for contractors to recruit are professional/technical staff and supervisors, brick layers and carpenters. The main reasons stated for difficultly in filling vacancies include a lack of required skills (47%), a low number of applicants with the required experience (44%) and a lack of qualifications (27%).
Build UK chief executive Suzannah Nichol MBE said: “While the industry demonstrated its resilience by continuing to grow during Q3, we can see that projects are increasingly affected by construction’s skills challenges. By getting behind the recommendations of the Farmer Review and delivering on the industry’s commitment at the Construction News Summit Skills Hack to reform the skills system, we can address these challenges and achieve change throughout the supply chain.”
Build UK represents over 11,500 specialist contractors in the contracting supply chain. The findings echo those of the second annual Lloyds Bank Commercial Banking report, published last month. It stated that almost one third (30%) of housebuilders said there were not enough skilled workers in the industry and highlighted difficulties in recruiting bricklayers, electricians, plumbers and joiners.