Downturn will decimate construction firms in 2012

Aaron Morby 10 years ago

One in 10 building firms fear they will not survive the predicted sharp downturn in work next year.

The shocking fall in confidence among construction employers facing up to an even tougher year in 2012 was revealed in a new survey by CITB-ConstructionSkills.

The survey of all sizes of contractors from sole traders to major builders revealed that more than half felt that either the next 12 months provided no business opportunities (29%), or that they had know idea where the opportunities would come from (27%).

The Employer Attitudes and Motivations report shows that many firms are already badly weakened by the banking crisis and spending cuts.

Nearly half of all businesses surveyed said they had suffered a decrease in turnover in the last year – with income falling by an average of 29%.

Sole traders have been hardest hit, 54% reported a drop in trade, followed closely by small firms employing between two and nine staff, at 48%.

Mark Farrar, chief executive of CITB-ConstructionSkills, said: “It has been another testing year for the construction and built environment industry. Times are tough and businesses need as much support as possible.

“Through listening to employers we know that their main challenges are reducing their expenditure, increased competition for contracts and preparing for new environmental legislation.

“We are further developing training packages to address these concerns, consulting with central and local Government to ensure that the public money which is being spent is done so transparently with a positive impact on the industry’s skills and continuing to speak with central and local governments about the positive impact construction has on local jobs.

“We’ve also implemented initiatives such as our Cut the Carbon campaign, which help to prepare the industry for new ‘green legislation’ and give them the skills they need to be as competitive as possible.”

These trends have taken their toll on employment levels across the sector. Around a third of contractors surveyed have laid staff off recently.

Britain’s woodworking industry was the most adversely impacted, with a quarter (25%) of the affected jobs being carpenters or joiners, just ahead of labourers at 24%.

But the jobs cull has not been restricted to the trades. In larger firms – those with over 100 employees – it was managers (23%) who were more likely to be made redundant.

On a regional level, there were mixed fortunes for different areas.

In the South East, for example, indicative figures show that there was a 13% spike in overall staff numbers, compared to a reduction of between 16-18%  in Northern Ireland, London and the South West.

The impact of the current economic climate has also seen training levels in the industry fall – with almost a third of businesses reducing their outgoings in this area.

This pattern was likely to continue into 2012, with one in five of employers planning to scale training budgets back even further.

Farrar warned: “When budgets are tight, training is sadly often one of the first areas to be reined in. This is particularly concerning given that one in six workers will retire in the next ten years, leaving a gaping hole in the industry’s skill base.

“We add value to employers in this area through a number of ways, such as our Management & Supervisory Development Programme which was introduced to improve the sector’s leadership attributes.

“But we’ll also continue to provide new, innovative solutions that respond to the industry’s changing needs.

“Only through swift action can we start to generate the right skills for future growth, locally and nationally.”

Latest news

Contractors lift tender margins to 9% on bids in the Capital

Developer Landsec to press ahead with trio of London office schemes this year despite cost inflation
15 hours ago

Fire safety work plunges Countryside to £182m loss

Countryside Partnerships forms dedicated division to handle retrofits on a 123 buildings
14 hours ago

Site wages row looms as union dismisses “derisory” pay offer

Unions want 10% increases but employers offer less than 4%
15 hours ago

Fusion wins Manchester high rise student block appeal

Planning inspector overturns city council refusal for 28-storey Deansgate block
15 hours ago

Failed London fit-out specialist owed trade firms £13m

Twenty 1 Group owed HMRC £9.7m leaving more than 300 firms with no hope of payment
1 day ago

Demolition work imminent on half-built Taylor Wimpey flats

Angry local residents share pictures of site set to be torn down
15 hours ago

B&K returns to strong profit growth across the group

Pre-tax profit jumps 23% to £65m as revenue edges up to £1.18bn
2 days ago

British Land expects tender price inflation to hit 10%

Developer says 91% of costs are fixed on planned schemes
2 days ago

Morgan Sindall set for £80m leisure and health hub

West Suffolk public service development to be built at no extra cost to tax payers
2 days ago

Plans in for £500m Hollow Mountain pumped hydro scheme

Work removing 2m tonnes of rock could start within two years
3 days ago

L&G to pump £4bn into West Midlands developments

West Midlands Mayor Andy Street signs landmark investment deal with L&G
2 days ago

Hunt starts for £250m Stockport 8 site developer

Town centre 8-acre site is earmarked for 1,200 homes, shops and leisure
2 days ago

Higgins bags trio of East London passivhaus schemes

Partnership to build 220 affordable homes for Newham council
2 days ago

Water industry revives PFI model for £1bn job

Vast Haweswater Aqueduct upgrade to pilot new DPC model, hailed as the future for water companies
3 days ago

VolkerRail fined £550,000 after trench collapse

Court hears how two metre deep excavation was unsupported
3 days ago

‘Ratty the Robot’ takes bite out of costly pipe inspections

Pipe-crawling tetherless robo-rat makes light work of complex underground inspections
3 days ago

Graham gets green light for £124m M25 Junction 28

Consent allows work to start this Autumn on Essex junction upgrade
3 days ago

Six win £600m panelised housing DPS deal

Better Building alliance of 29 housing associations signs up manufacturers
3 days ago

Watkin Jones reports record £2bn pipeline

Student rooms and BTR builder plans corporate name change in big rebrand
3 days ago

Race starts for £500m Scottish zero carbon hospital job

Bidding starts for new University Hospital Monklands near Airdrie
4 days ago

Manchester airport taxis out £60m terminal 2 pier job

Bidding to start before the end of 2022 for project start early next summer
4 days ago

Plan for 1,100-home complex at Leicester factory site

Galliford Try investments plots Corah Factory transformation
4 days ago

Axed House by Urban Splash staff plan legal action

Ex-workers consult with lawyers following administration
4 days ago

Summer slowdown fears as latest contract award data droops

Latest Barbour ABI Snap Analysis paints uncertain picture
4 days ago

Farrans wins £39m Somerset recycling hub

Site preparation gets underway for Keynsham Recycling Hub
4 days ago

Balfour gets green light for £250m M25 junction 10

Autumn start for M25 junction 10/A3 Wisley interchange improvement scheme
7 days ago

Leeds plumbing contractor sinks with loss of 30 jobs

Dickinsons Plumbing and Heating goes down but renewables arm salvaged in sale
7 days ago

HS2 achieves first diesel-free construction site

Skanska Costain STRABAG JV runs Kilburn site with green kit
7 days ago

Administration confirmed at House by Urban Splash

160 jobs lost following "operational issues" at modular factory
1 week ago

Network Rail fined £1.4m after worker crushed by track machines

Judge highlights "many layers of failure" within site management
1 week ago

Contractor services