UK construction sector struggles amid increase in demand

09 Aug 2021 CW Team

The United Kingdom’s construction industry is struggling to keep up with a surge in demand for new building work, complaining that shortages of skilled workers and supplies are delaying projects.

Since February, a survey of purchasing managers last month indicated the weakest growth, Information Handling Services (IHS) Markit said.

Four in five construction firms surveyed by the Royal Institution of Chartered Surveyors (RICS) said that the building material shortages are constraining activity, and two-thirds find it hard to hire bricklayers and carpenters.

The findings indicate headwinds weighing on the speed of recovery in the construction industry and on the wider economy. Relaxing pandemic restrictions have unleashed pent-up demand, adding to inflationary pressures on both wage costs and the raw materials cost.

Economics director at IHS Markit, Tim Moore, said in a report that the long lead times for materials and contracting subcontractor availability were factors for holding back work. Another rapid rise in purchasing costs is linked to global supply and demand imbalances. The UK construction purchasing managers index (PMI) dipped to 58.7, well below the 24-year high of 66.3 in June. Economists had anticipated a more gradual slowdown to 64.4.

Labor shortages have become especially acute in the UK since the country exited from the European Union (EU), decreasing the pool of skilled workers. In the last four years, the number of European Union construction workers has halved, and contractors who laid-off workers during lockdowns are struggling to hire them back.

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