Downturn will decimate construction firms in 2012

Aaron Morby 12 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.”

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