Post Brexit skills shortages to push up tender prices by 4%

Grant Prior 12 months ago
Share

Tender prices are set to rise by 4% in 2022 as post-Brexit skills shortages bite across construction.

The latest forecasts from Arcadis predict rises after a period of industry “treading water” while politicians dither over Brexit.

The consultancy has held its short term inflation forecast at just 2-3% to 2021 as clients take a ‘wait-and-see’ approach to the current political turmoil.

Delays are adding competitive pressure to the market but the trend is highly sector specific.

Markets such as data centres are particularly busy, while others including offices, industrial and schools are on a downward curve.

Arcadis said there is enough competition to put a partial brake on input cost inflation in the short to medium term.

But tighter labour markets from 2022-23 means costs are predicted to rise by 1% per annum, reaching 4% by 2022.

Earnings growth for construction employees has averaged 4.2% over the past year, up from 2.1% in 2017.

Simon Rawlinson, Head of Strategic Research and Insight at Arcadis, said: “UK construction has a long-established skills and training problem.

“With skilled EU labour making up 8-10% of the workforce, specialist contractors and employers have been shielded from the necessity of developing and maintaining the skills of their workforce.

“However, with the prospect of post-Brexit restrictions on migration, we’re now facing a real crisis in terms of future labour capacity.

“The supply chain will need to look at other options for increasing productivity.

“Off-site manufacturing currently delivers around 8% of industry output, but with the introduction of a government mandate, this could increase significantly.

“Adopting new technologies to improve processes will help to eliminate waste and duplication, while a renewed focus on training and re-training – particularly with the introduction of T-levels in 2020 – will further help to support a much-needed flow of talent.”

 

Latest news

Union calls for construction workers to wear masks

Unite demands revisions to Construction Leadership Council guidelines
10 hours ago

Failed NHS Nightingale joinery firm sold in pre-pack deal

J&P Carpentry and Joinery went into administration after working on Birmingham NEC hospital
8 hours ago

Vistry asks subcontractors to cut rates

House builder warns trade packages could be retendered
14 hours ago

TClarke rides out lockdown and eyes £2m half-year profit

M&E boss says swift cost savings helped firm breakeven in April and May
14 hours ago

Kier confirmed for £97m Heartlands Hospital job

Work to start this summer on Ambulatory Care and Diagnostics Centre
14 hours ago

Costain completes £100m fund raise

Dubai contractor takes 15% stake in Costain
13 hours ago

Tycoon’s £1bn flats scheme consent quashed in Whitehall U-turn

Housing secretary accused of bias in backing Richard Desmond's 1,500-flat Isle of Dogs scheme
1 day ago

First pictures of giant HS2 tunnelling machines

TBMs being manufactured in Germany before launch on site later this year
13 hours ago

M&E contractors hoping to ‘hold on’ through covid crisis

Engineering services leaders urge whole supply chain to work together to survive
14 hours ago

Griffiths to start £25m historic Welsh viaduct upgrade

Restoration work to start next month on 150-year-old wooden viaduct
13 hours ago

Keep the industry updated by joining the Enquirer Directory

Membership lets construction know you are open for business now or in the future
2 years ago

Barratt subcontractor rate cut letters “sent in error”

Specialists assured that 15% rate reductions are "not company policy"
2 days ago

NHS Nightingale joinery firm goes under

J & P Carpentry and Joinery collapses weeks after fast-track NEC conversion
2 days ago

EDF seeks consent for £18bn Sizewell C nuclear plant

Project will employ 25,000 construction workers, delivering a big post-covid 19 stimulus
2 days ago

Covid-19 compliance officers keep Ballymore sites safe

Contractors can draft in virus-protection help from new specialist supplier
2 days ago

ISG secures £17m Dudley leisure centre

Work to start on delayed Flood Street area leisure centre and swimming pool
2 days ago

Construction output to plunge 25% this year

Despite a strong rebound 2021 forecast to be down 6% from last year
2 days ago

£1bn building safety cladding fund open to applicants

Residential building owners can apply for funding for remedial work on non-ACM cladding systems
2 days ago

Roads contractors told to halve accident rates

Highways England aims to build on improved site safety performance seen during covid-19
3 days ago

Keepmoat to restart work on sites across England

House builder employs 1,150 staff and supports 10,000 supply chain jobs
3 days ago

A66 TransPennine £1bn upgrade route picked

Amey/Arup JV wins £45m design contract
5 days ago

Plan in for station on £40m revived Birmingham rail line

Plan lodged for new Moseley station on Camp Hill railway re-opening project
3 days ago

Highways firm trials social distancing tags on sites

Lightweight system can be clipped on belts, lanyards or hard hats
3 days ago

Ferrovial drops Agroman name

Ferrovial Construction become major project brand
3 days ago

Button pressed on race for £25m lift framework

Specialists wanted for four-year deal across north of England
3 days ago

Jones Bros wins retendered Kier road scheme

Cambridgeshire County Council claims £10m cost saving after job rebid
7 days ago

Scottish firms told to prepare sites to re-open

First Minister says safe return must be in partnership with trade unions
1 week ago

Skanska’s M42 Solihull junction upgrade approved

Work to start on the £143m new dual carriageway and junction in late summer
7 days ago

Graham wins M25 Cheshunt junction upgrade

Work to start next January on North London junction upgrade
6 days ago

Pre-fab elevated walkways designed for social distancing

Structural engineers unveils design for demountable walkways for events
7 days ago

Contractor services