The Construction Industry Training Board’s (CITB) annual migration report has revealed that the construction migrant workforce continues to fall and at a worryingly rapid speed, meanwhile demand, costs, and wages surge
Output growth is at its highest level in almost 25 years but the demand for workers is simply not being met.
Migration in UK Construction 2021 finds that the industry needs workers more than ever and coupled with the rising cost of materials and wages – the industry is struggling to cope.
Why are there fewer migrant construction workers?
Since the UK left the EU and the EU Freedom of Movement came to a sudden end – a significant number of construction workers left the country. The pandemic has caused even greater numbers to leave and so far, they have not returned.
Add to that the phenomenal increase in demand for construction work since Covid-19 restrictions have been eased, and it is not hard to see why the industry is feeling the pressure.
Key findings from the research showed:
- In 2020, the number of migrant workers in the UK construction industry fell by 8.3% – this is a decrease of 25,000 workers from 2019. On a much broader scale, the whole industry is shrinking by a similar percentage
- Over the last three years, one in every seven migrant workers has left the construction sector. In other words, this is a decrease of 15% from over 326,000 to just 280,000
- London boasts the highest concentration of migrant construction workers in the UK – half of the workforce are migrants. However, the capital has also been hard hit and the number has fallen from 145,000 in 2019 to 125,000 in 2020, a reduction of 15%
- The Office for National Statistics (ONS) data reports year-on-year wage rises, with bonuses and arrears peaking at +15.1% nationwide in 2021, a continued increase above average at +6% in September 2021 against a whole economy reading of +4%, supporting anecdotal evidence that labour shortages are driving up prices
- Many employers are simply not engaging with the Points Based Immigration System (PBIS) licence scheme to enable them to hire non-UK born workers, particularly SMEs
- In addition, several large and medium-sized employers were concerned that some skilled trades were not accessible through the skilled worker visa including dryliners, asbestos workers, and insulators
One construction employer in the south-east of England told researchers:
“The impact will be that I can’t take on as many jobs and I’ve got to let my clients down. I’ve already turned down three jobs this week, and we never turn away work…I think that’s going to be the reality going forward.”
New immigration system
Steve Radley, director of policy at CITB, said:
“The transition out of the EU and into a new immigration system was always going to be difficult and the pandemic and interrupted supplies of materials has intensified skills and cost pressures.
“We know that developing homegrown talent will be at the heart of addressing these skills challenges and that government is taking action to grow apprenticeships and to get more college students into construction jobs.
“Employer investment in key skill areas such as apprenticeships is recovering and should improve further in 2022. But for many, their struggle to deliver on the current workloads is hampering their ability to free up time to invest in training just when it’s most needed.”
‘Small construction companies have had to turn down jobs’
Brian Berry, chief executive of the Federation of Master Builders (FMB), said:
“The fall in the number of construction migrant workers over the last three years is not surprising and helps to explain why many small construction companies have had to turn down jobs because of the lack of available workers.
“At a time of rising demand in the construction sector it is imperative that more home-grown talent is developed. Unfortunately, this is not an easy fix which is why the building industry will continue to experience an on-going skills problem over many years.”
James Butcher, head of policy and research at the National Federation of Builders (NFB), said:
“This is a really tough time for construction businesses, our members are regularly reporting that they are struggling to find the workforce they need to meet demand on site and the latest vacancy rate statistics indicate the situation is acute.
“The report findings confirm what many in the industry feared – a significant and sudden drop in the number of migrant workers in the construction workforce which, coupled with the lower apprenticeship starts and difficulties securing FE conversions, mean the short-term pressures are significant and there is no easy way out.”
Reskilling the UK workforce
Suzannah Nichol, chief executive of Build UK, said:
“As construction looks to lead the economic recovery, the government is rightly investing in training and reskilling the UK workforce whilst the industry develops better routes for new entrants.
“We welcomed the recent commitments in the Autumn Budget to improve skills and recruit talent, but these will all take time to come to fruition and we are being asked to build now, not in 12 months.
“To ensure the industry can continue to deliver the ambitious programme of infrastructure investment and development, it is vital that we have a Points-Based Immigration System that can respond rapidly to changing pressures, with a clear path for the industry to raise these with government.”
Alasdair Reisner, chief executive of CECA, said:
“Our members continue to experience very challenging conditions for recruitment and retention of workers. The likely outcome of this will be that those areas that have historically had higher levels of migrant labour, and generally higher salaries, such as London and the South East, will now pull resource from the rest of the country, exacerbating skills difficulties nationwide.”
