The latest sector-wide Building Engineering Business Survey, sponsored by Scolmore, shows that, while turnover is predicted to grow through the rest of 2021, ongoing materials and labour shortages are likely to worsen.
The survey, which includes data from industry trade bodies ECA, BESA, SELECT and SNIPEF, shows that specialist contractors are particularly concerned about lack of skilled staff able to meet growing demand for the sector’s services.
There are shortages of skilled labour in all specialist sectors, and this is pushing up labour costs. As a result, 26 per cent of survey respondents said they would hire fewer agency workers and subcontractors in Q3 compared with Q2. Just under a quarter (23 per cent) said they would hire fewer apprentices despite the urgent need to increase the flow of new skilled people into the industry.
Nearly two thirds (61 per cent) said they expect the ongoing shortages of materials and equipment to deteriorate as the year goes on (Q3 vs Q2). Individual respondents highlighted the lack, and rising prices, of cables, cable trays and containment, as well as growing lead times and delays in deliveries.
However, more than 8 in 10 (85 per cent) of respondents expect their turnover to remain the same or increase in Q3 2021, compared with Q2. Almost 9 in 10 (87 per cent) expect turnover to stay the same or increase between now and the end of 2021.
Rob Driscoll, ECA Director of Legal and Business, said: “A backlog of jobs may appear good on paper, but if the ongoing shortages are not resolved soon, in practical terms, this will mean a further squeeze on costs and margins for contractors who are at risk of tendering for today and buying negative cash-flow problems for tomorrow.”
BESA’s director of legal and commercial Debbie Petford also called for an increased focus on training for competence and compliance to fix some of the industry’s longer-term problems. She said: “While shortages of materials are clearly an immediate problem and will persist through the rest of this year, we must also find a way of addressing these endless cycles of skills shortages that make it very hard for businesses to plan with confidence.”
Alan Wilson, Managing Director of SELECT, said: “As this survey shows, there are very real concerns about the availability of competent people, so it’s essential that we train the talent of tomorrow now and equip them with the skills to thrive in the electric future that awaits us all.”
Fiona Hodgson, Chief Executive of SNIPEF, added: “We continue to hear from members that there are simply not enough skilled installers to meet current demand. With fewer apprentices being recruited during the pandemic this has exacerbated the issue and we are deeply concerned this will impact on Government targets and future projects.”