London's Construction scene - We break it down!
London has long been a hub for infrastructure and development projects which have ultimately increased the demand for skilled labour within the city’s Construction sector. Despite the slowdown in output and growth that rattled the industry nationwide in the second and third quarter of 2017, there continues to be investment towards major development and infrastructure projects in London.
Following the launch of Search Consultancy’s expansion to London, where I will develop our construction recruitment offering, I break down the construction scene in London, and highlight why the blue collar workforce should pursue a career there.
What made 2017 a rollercoaster year for London's Construction market
From Brexit, to reports suggesting that the sector is struggling, to seemingly climbing out of a recession thanks to a surge in housebuilding, it’s fair to say that London’s Construction industry underwent some rocky challenges over the course of last year.
From a regional perspective, perhaps the sector’s most notable cause for concern was a shift in investment from London to the north, with developers in pursuit of cheaper land. This shift was emphasised by the benefits of buying outside the capital. Eight or ten homes in the northern regions could cost a similar amount to just one home in London, and yet investors get capital growth and more homes in their portfolio to rent.
However, that isn’t to say that there was zero growth within London’s construction sector in 2017. On the contrary, there continues to be a demand for infrastructure developments, which in turn has increased the need for skills. As it stands currently, a record of approximately 455 new tall buildings are planned or under construction in London. Of these, some big names include The Scalpel, Chelsea Waterfront, Keybridge House, Two Fifty One, Embassy Gardens, Manhattan Plaza and The Atlas. In addition, Camden Council’s planning committee granted internet giant, Google permission to set up its new Head Quarters at Kings Cross.
While the high volume of development projects is certainly a good indication of how London’s construction scene is continuously growing, it has also increased the demand for skills to further develop and sustain it.
The impact of Brexit on skills and investment
In my view – and I’m sure my clients would agree – the prospect of Brexit has been and continues to be a major topic of discussion within London’s construction sector. The uncertainty alone of what lies beyond Britain’s exit from the EU sent shockwaves throughout the industry last year, leading to more cautious investment and speculation about how a hard-line stance on immigration could impact the supply of skills. These factors were more than likely responsible for the nationwide slowdown in growth of the UK’s construction sector in the second and third quarter of last year.
Recent statistics show that Britain’s shortage of surveyors, bricklayers and other construction workers is holding back building work just at a time when the country needs more housing and infrastructure. While the construction industry continues to expand, having the required labour force will be vital to both propel and sustain growth.
Meanwhile, London’s Mayor, Sadiq Khan has warned that a loss of skilled EU workers could have a detrimental effect on home building and other construction projects in London. According to the report he published last year, one in four of London’s construction workers are from the EU. This means that of those working in London’s construction sector – the workforce behind building much-needed new infrastructure, affordable homes and office space in the capital – 95,000 are from the EU.
His ‘Housing in London’ report shows there are 350,000 people who work in London’s construction sector, of which just over half are from the UK, while 27 percent are from the EU. The remaining part of the workforce is from other European countries (three per cent), while 14 per cent is from the rest of the world.
Industry experts also suggest that London needs up to an extra 13,000 new workers each year until 2021 in order to plug the skills gap and meet the additional demands on the construction industry, highlighting just how important it is for London to be able to continue to attract the talent it needs post-Brexit.
Furthermore, the struggle to recruit and retain within the sector has been shown to present financial costs to construction firms throughout London. Research by the Open University found that difficulties recruiting the right people at the right time is costing firms approximately £2bn a year, saying that 90 per cent of employers have encountered trouble finding people with the right skills over the past year.
Because London’s construction sector is far more reliant on migrant labour than anywhere else in the UK, the city will likely require a short to medium term continued access to EU migrant labour. From a long term perspective, the construction sector must work in partnership with developers to conceptualise and implement a clear strategy for attracting and training more talent within the existing population
In addition, industry leaders would do well to prioritise and support the development of innovative and higher productivity construction techniques which are less labour intensive, thus helping to future proof the industry.
What's in store for London's Construction sector in 2018
London is changing! By 2020 the population is expected to grow to over 9 million and by 2031 it is forecast to reach over 10 million. These changes will result in a greater demand for commercial and residential properties, as well as the need for a dedicated transport infrastructure.
With skill shortages presenting major challenges to construction firms, I predict that Brexit will continue to be a real issue as the year progresses, particularly in terms of recruitment and careers. The UK’s departure from the EU has thrown the issue into sharper focus given the industry’s reliance on overseas labour, meaning the drive to attract and retain talent has never been so vital.
To solve this problem, it is imperative that employers showcase the true earning potential, creative roles and development paths within their businesses. As the use of technology becomes widespread in the sector, construction firms should find it easier to attract millennials who thrive on using the latest technology. Whilst it is great to see the industry investing heavily in recruitment and training of young people, these initiatives are ones that must continue to receive attention, if the industry to combat the current labour shortage.
Overall, the outlook for the industry is bright, but it will have its challenges. In order to stay ahead of the curb, employers must continue to equip themselves with relevant knowledge of how the industry is evolving and maintain an open mind to new ideas and ways of working.
Looking for a Construction job? We can help!
If you’re looking for a role in construction or alternatively a company looking for skilled trades & labour staff in London, you can contact Patrick O’Reilly at [email protected]. Alternatively, you can have a look at our latest vacancies by clicking the button below!